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Question
How does net wealth compare across countries and households in Europe?
Main definitions
Net wealth = real assets + financial assets - debt
Income = combined annual income of all members of a household
Quantiles = set of values of a variable which divides the frequency distribution of that variable into equal groups, each containing the same fraction of the total population.
Main background facts for the survey
For detailed information on the methodology, please refer for the Austrian HFCS to the methodological notes and the first results and for the Eurosystem HFCS to the methodological report and the results report.
*This dashboard does not include results for Spain, as the Spanish data were not available at the time of release. As soon as the Spanish data are available, we will update the dashboard in order to include results for Spain.
Source: Eurosystem HFCS 2017.
We first take a look at the distribution of net wealth in each country.
The table shows the distribution of net wealth across households for every country. Households are arranged according to their absolute net wealth (in EUR thd) from low (P1) to high (P99).
Dispersion is high in every country: households with very low and very high net wealth can be observed.
In Austria, approximately 50% of all households have a net wealth below 83,000 euros. Only 5% of all households have a net wealth above 866,000 euros. Some countries (e.g. Italy) have higher medians but comparatively lower wealth values at the right tail of the distribution.
Note that the table allows to sort the countries according to their net wealth value for each percentile.
Source: Eurosystem HFCS 2017.
The table shows different measures of wealth inequality across countries.
According to the Gini coefficient, where a higher value expresses higher inequality, Austria belongs to the countries with the highest wealth inequality (0.73) together with the Netherlands (0.78), Cyprus (0.75) and Germany (0.74). This ranking changes when other inequality measures are used.
In all countries, households in the lower half of the distribution hold only a tiny fraction of aggregate wealth. The 50% poorest households hold less than between 15% of total net wealth in Slovakia and 0.5% in the Netherlands, while the 5% richest households hold more than between 27% of total net wealth in Greece and 49% in Cyprus.
The high inequality of the wealth distribution in Austria and Germany and the very small fraction of aggregate wealth held by households in the lower part of the wealth distribution in these two countries, reflect the fact that the well-developed welfare state in both countries offers many state-organized insurances against the contingencies of life as substitutes for private wealth (for a more detailed discussion see Fessler and Schürz (2018)).
Source: Eurosystem HFCS 2017.
The graph shows the location of the countries according to the Gini coefficient of gross income and net wealth. Due to generally higher Gini of wealth than of income the range of the x-axis differs from the one of the y-axis.
Countries with low Gini of income and low Gini of wealth can be found in the lower left corner, those with high Gini of income and high Gini of wealth in the upper right corner of the graph.
There is no strong correlation between the Gini of income and the Gini of wealth.
On the one hand, there are several countries with high wealth inequality but low income inequality (e.g. Austria) or countries with low wealth inequality but high income inequality (e.g. Lithuania).
On the other hand, there are also countries with low wealth inequality and low income inequality (e.g. Slovakia), or countries with high wealth inequality and high income inequality (e.g. Estonia).