Caribbean Netherlands: income inequality lowest on Saba

31/10/2016 15:30
Of the three Caribbean islands, Saba had the lowest income inequality in 2014. According to Statistics Netherlands (CBS), the distribution of incomes on Saba has become less uneven since 2011. On Bonaire and St Eustatius income inequality has hardly changed since 2011.

In 2011, Bonaire had the lowest income inequality of the three islands. The Gini coefficient stood at 0.39. The Gini coefficients on Saba and St Eustatius were marginally higher. Since 2011, income inequality on Bonaire and St Eustatius has hardly changed, but Saba’s Gini coefficient fell to 0.35 in 2014. This was partly due to an additional increase of benefits and minimum wages in that year.

Internationally, the Gini coefficient is the most frequently used instrument to measure income inequality, expressed as a value ranging between 0 (all households have the same income) and 1 (one household has all the income and the rest of the households have zero income).
The Gini coefficient for the Netherlands, for example, was 0.29 in 2014, but within smaller geographical units, such as municipalities, differences may be larger. In 2013, the Gini coefficient varied from 0.22 to 0.44. The Gini coëfficiënt for Amsterdam was 0.36, while the municipality of Wassenaar accounted for the highest income inequality.

Income inequality households, 2011-2014

Income distribution according to Pen’s parade

Pen’s income parade is a graphic representation of income distribution. The duration of Pen’s parade is one hour, during which all households in an economy pass by as marchers with their height proportional to their income and ordered from lowest to highest. The average-income household has a height of 1.70 metres, corresponding to the average height of residents of the Caribbean Netherlands in 2013. Households with incomes below average are smaller, low-income households are depicted as dwarves, high-income households as giants.

On Bonaire (situation in 2014), the first marchers are invisible because these households suffer losses and have a negative income. Subsequently, the spectator will see a parade of dwarves, representing low-income households, relatively often depending on benefits and pensions. After exactly 30 minutes, the household with the median income (16.7 thousand dollars) will emerge. The average-income (20.7 thousand dollars) household is not yet visible by then. Due to the skewed income distribution on Bonaire, the average-income household does not appear until in the 38th minute. In most households that follow, the main breadwinners are employees or entrepreneurs.

Pen\'s parade: Distribution of incomes on Bonaire, 2014

The median incomes on St Eustatius and Saba were 18.7 thousand and 18.6 thousand dollars respectively. The average incomes on both islands (23 thousand dollars on St Eustatius and 21.9 thousand dollars on Saba) show up in the 37th minute. The giants on St Eustatius and Saba appear in de 60th minute and were respectively more than 7.5 metres and nearly 6 metres tall. The giants on Bonaire had an average height in excess of 9 metres.

This is the first time CBS publishes data on income inequality in the Caribbean Netherlands.