Disposable household income falls further

24/12/2013 09:30

Real disposable household income in the Netherlands was 2.6 percent lower in the third quarter of 2013 than twelve months previously. This downward tendency has been visible for a number of quarters now, and the reason is that income has not been rising while inflation has. All changes described here are moving annual totals: the data for the four quarters of a year are combined.

Contributions to year-on-year change in real disposable income

Inflation and taxes have a particularly strong effect on income

Although increases in taxes and social security contributions had a negative effect of 2.8 percentage points on disposable income, once again inflation was the main factor contributing to the decrease: it accounted for minus 2.9 percentage points. The decrease in income from production activities and from social benefits and net property income also contributed to the fall. 

Wage developments

Slight decrease in wages received by households

Total wages received by households have risen hardly or not at all in the last four quarters. This has had a large negative effect on disposable income, as wages are a key component of this income. If income from wages does not rise, overall income of employees will be nibbled away by inflation. In spite of an increase in the wages per labour year, total wages received hardly increased; this was caused by the decrease in the number of employee jobs in the third quarter.

Social benefits received compared with 3rd quarter 2011

Income from social security continues to rise

For more than a year now, unemployment has been rising while the number of jobs has been falling. Employees who lose their job may be eligible for unemployment benefit, and indeed in the third quarter there was a rise in the number of claimants of this benefit. The amount paid by the government in health care allowances also rose, and lastly the increases in state and supplementary old age pensions were also important factors in the increase in income from social benefits and provisions. The number of people receiving state and supplementary old age pensions has been rising systematically since 2011, as more and more people born in the post-war baby boom are retiring.