Business & Economy Czech Republic News

Czech Republic and Slovakia have lowest income inequality in the EU

Brno, Czech Republic – The EU Commission recently published its annual European Semester reports, a yearly assessment of the social and economic situation of all EU member states. According to its findings, the Czech Republic and Slovakia are the two most egalitarian nations throughout the bloc when it comes to income and wealth distribution.

According to the European Commission report, the income of the richest 20% people in the Czech Republic is 3.4 times higher than the income of the poorest 20% of the population. The ratio has remained roughly at the same level throughout the last decade. Slovakia reported the second lowest ratio of income inequality in Europe (3.5), tied with Slovenia and Finland.

Both Poland (4.6) and Hungary (4.3) also remain below the European average.

At the EU level, the richest 20% earned on average 5.1 times more than the poorest 20% of the population. At the opposite end of the scale, the most significant income inequality can be found in Bulgaria (ratio of 8.2), Lithuania (7.1), Romania (7), Spain and Greece (both 6.6), according to EU data.

The Czech Republic also stands out as having the lowest proportion of people threatened by poverty and social exclusion (12.2%, ten percentage points lower than the EU average): in 2017, around 1.2 million people were still considered at risk of poverty or social exclusion, 300.000 less than ten years ago.

Slovakia also performed well in that category, with 16.3% of the population (more than 850.000 people) considered at risk of poverty or social exclusion, the third lowest ratio in the EU. But some parts of the population are more vulnerable than others, as “close to 200.000 Roma people live in marginalised communities often without access to basic infrastructure and public services”, the European Commission points out.

This is particularly the case for both countries’ youth: only 1.5% of young employed Czechs and 3.8% of young employed Slovaks are considered at risk of poverty, once again the two lowest rates in Europe.

Last year, we already reported that both Slovakia and the Czech Republic had the lowest Gini coefficient – the most widely used instrument to measure income inequality – in all OECD countries.

3 comments on “Czech Republic and Slovakia have lowest income inequality in the EU

  1. Is it because there is not massive immigration from the Third World?

    Like

  2. Great article! Yet more evidence that policies which lessen the gap between the highest and lowest earners result in a greater quality of life for the majority of people. In so many countries the number of people struggling to feed themselves is rising despite an increase in national gdp. I wrote an article on the relationship between income inequality and happiness if anyone wants to look into this more. Thanks again for the great info 😁 https://adambolandblog.com/2018/04/05/is-there-a-relationship-between-income-inequality-and-happiness-on-a-national-scale/

    Like

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