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Published: 20 May 2010

The first phase of the recession lowered real income of high and low-income households

The recession that started in the latter half of 2008 claimed nearly 15 per cent of households’ property income and almost seven per cent of their entrepreneurial income compared with the income accumulation in the previous year, but wage and salary income still grew by around one per cent. According to Statistics Finland's income distribution statistics, measured by the median of households’ disposable income the average income level remained almost unchanged.

Real change in households’ disposable income by income decile in 2008, %

The income level weakened at the extreme ends of the income distribution. The income of the highest-income households decreased most and the share of the richest income decile in all income declined for the first time since 2002, mostly due to reduction in sales profits. On the other hand, the income of the lowest-income decile diminished due to real weakening of basic social security and rise in housing costs.

The strong fall in property and entrepreneurial income resulted in lowering of income in entrepreneur households in 2008. However, entrepreneurs’ income has grown in the 2000s faster than that of other socio-economic groups. The income of unemployed persons diminished by 3.5 per cent in 2008. Over the 2000s the livelihood of the groups living mostly on income transfers, unemployed persons and students, has fallen even more behind the level of the average income earner. Even so, the income of students rose by 4.5 per cent in 2008.

The average income level among those living in rental households is clearly lower and growth in income slower than among those living in owner-occupied dwellings. In 2008 the housing expenditure burden, or the share of housing costs of disposable monetary income, was 20 per cent, on average. For those living in rental dwellings the burden was, on average, 27 per cent, for those living in indebted owner-occupied dwellings 15 per cent and for those living in debt-free owner-occupied dwellings eight per cent. The burden is highest for the lowest-income earners and it falls when income grows: in the lowest income decile the burden was, on average, 40 per cent of income, in the highest eight per cent. Inclusion of instalment of housing loans increased the burden most in the highest income group, to 14 per cent, on average.

A comparison of housing conditions in 29 European countries shows that Finland belongs to countries with bigger than average rental markets with its around 34 share. The share of rental dwellings is higher than this in ten countries. The share is biggest in Germany where every second household lived in rented housing. Finland’s average housing expenditure burden was the tenth lowest in Europe.

Average income in households by different income definitions 2000-2008, in 2008 value of money

Corrected on 20 May 2010 at 13.30. The corrections are indicated in red, were previously 2 483 000 and 2 513 000.
		2000	2001	2002	2003	2004	2005	2006	2007	2008
Disposable household income	Mean	32 100	32 400	33 200	34 300	35 900	36 800	37 300	38 300	37 700
	Median	26 400	27 300	28 200	29 000	29 500	30 900	31 100	31 300	31 200
Disposable income per consumption unit*	Mean	20 900	21 000	21 600	22 400	23 400	23 900	24 300	25 100	24 800
	Median	18 100	18 500	19 200	19 700	20 500	21 200	21 300	21 700	22 000
Disposable household cash income	Mean	29 100	29 400	30 000	30 900	32 500	33 300	34 000	35 300	34 800
	Median	23 500	24 300	25 200	25 800	26 400	27 600	28 000	28 300	28 400
Disposable cash income per consumption unit	Mean	18 800	19 100	19 400	20 100	21 100	21 500	22 100	23 100	22 800
	Median	16 300	16 700	17 100	17 600	18 300	19 000	19 200	19 800	20 100
Households	Number	2 373 000	2 381 500	2 397 500	2 405 000	2 415 000	2 435 000	2 455 000	2 483 500	2 513 500

• *Consumption units: the 1. adult of the household 1,0 - other aged 14 or older 0,5 - persons aged 0 - 13 0,3 (= so called OECD modified equivalence scale)

Source: Income Distribution Statistics 2008, Statistics Finland

Inquiries: Juha Honkkila (09) 1734 3651, Hannele Sauli (09) 1734 3497, toimeentulo.tilastokeskus@stat.fi

Director in charge: Riitta Harala

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Appendix tables

• 1. Income shares of decile groups (%) in 1966 - 2008. Decile groups have been formed among persons according to disposable income per consumption unit. (20.5.2010)
• 2. Gini-coefficients for factor income, gross income and disposable income, and redistributive effect of current transfers on income differentials in 1966 - 2008. (20.5.2010)
• 3a. Mean income by decile group in 1987 - 2008. Decile groups have been formed among persons according to disposable income per consumption unit. (20.5.2010)
• 3b. Median income by decile group in 1987 - 2008. Decile groups have been formed among persons according to disposable income per consumption unit. (20.5.2010)
• 4. Upper limit on income by decile group in 1987 - 2008. Decile groups have been formed among persons according to disposable income per consumption unit. (20.5.2010)
• 5. Household income: structure by brackets ordered according to households' disposable income 2008. (20.5.2010)
• 6. Household income: structure by brackets ordered according to households' gross income 2008. (20.5.2010)

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Updated 20.5.2010