Coins and banknotes on a surface on 1 November 2022. Statistics Finland has released data indicating that income differences, as measured with the Gini coefficient, widened to a 14-year high in Finland in 2021. (Heikki Saukkomaa – Lehtikuva)

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INCOME DIFFERENCES widened clearly from the previous year in Finland in 2021.

Statistics Finland reported last week that the Gini coefficient increased by 1.4 percentage points year-on-year to 29.1 per cent in 2021 – close to the all-time high of 29.5 per cent recorded in 2007 – as capital gains boosted incomes in the high income groups more than in other income groups.

Income differences in the country were at their lowest in the mid-1980s, with the coefficient standing at 20.3 per cent in 1987. They widened rapidly especially in the second half of the 1990s, with the coefficient surging from 22.2 per cent in 1995 to 28.4 in 2000.

The differences remain moderate in global comparison, though.

The Gini coefficient is one of the most widely used measures of relative income differences in the world. A reading of 100 represents perfect income inequality and one of 0 perfect equality.

Statistics Finland reported that also euro-denominated income differences have grown significantly in Finland since 1995. Last year, average annual income in the lowest income decile was 11,703 euros, 6.6 times lower than the 77,400-euro average in the highest decile. While the average in the lowest decile has crept up by 31 per cent since the mid-1990s, that in the highest decile has surged by 103 per cent.

Finland, the statistical bureau said, was home to 719,000 low-income people in 2021, a figure that accounts for 13.2 per cent of the population. The share of low-income people had stood at 12.5 per cent in 2020.

People are defined as low-income if their net income is less than 60 per cent of the median income in the population. The threshold stood at 1,350 euros a month, or 16,250 euros a year, for a one-person household in 2021.

Aleksi Teivainen – HT

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