Disposable income of households in Latvia is up, but so is income inequality

Compared to 2019, household disposable income, increased by 8.1 % in 2020, reaching EUR 630 per household member monthly. Population income grew faster than in 2019, when it rose by 6.8 %.
Compared to other EU Member States6, income inequality in Latvia remained high. According to the latest available data, Latvia had the second highest Gini coefficient compared to other EU countries. In 2019, only Bulgaria had a higher rate (40 %). The quintile share ratio was the second highest in the EU. Only Bulgaria had a higher quintile share ratio in 2019 (8.0), while the situation was similar in Romania, where it was the same as in Latvia – 6.6, according to results of the survey conducted by the Central Statistical Bureau of Latvia in 2021.
The highest incomes were in Riga, where they amounted to EUR 751 per household member per month. In Pierīga incomes were EUR 718 per household member per month, in Zemgale – EUR 557 and in Kurzeme – EUR 527. The lowest incomes were in Vidzeme (EUR 518 per month) and Latgale (EUR 445 per month). In urban areas income per one household member reached EUR 657 monthly and in rural areas – EUR 573 monthly.
For households with one adult and children under 17, income per household member fell by 8.9 %, from EUR 483 per household member per month in 2019 to EUR 440 in 2020. For couples with three or more children, income decreased by 0.3 % over the year. Income grew fastest for couples without children and couples with one child, by 13.7 % and 10.6 % respectively.
The amount of social transfers (pensions, allowances and other budgetary payments) grew significantly faster than income from labour. Income from social transfers per household member increased by 14.1 %, from EUR 133 per month in 2019 to EUR 152 per month in 2020. In turn, household income from labour per household member increased by only 6.0 %, from EUR 412 to EUR 436 per month.
Income from labour accounted for 69.2 % of household disposable income and social transfers for 24.1 %.
In 2020 income per household member in the poorest households (1st quintile group) comprised EUR 214 monthly, but in the richest households (5th quintile group) – EUR 1 408 monthly. In households with average income they fluctuated from EUR 367 monthly (2nd quintile group) to EUR 721 monthly (4th quintile group).