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Singapore's household income inequality falls to 18-year low

HOUSEHOLD income inequality in Singapore has fallen to its lowest level in almost two decades, according to figures released by the Singapore Department of Statistics (SingStat) on Thursday.

The Gini coefficient, based on household income from work per household member, was 0.452 last year, lower than the 0.458 in 2018 and its lowest since 2001.

The Gini coefficient measures income inequality from zero to one, with zero being most equal.

Household income from work includes employer Central Provident Fund contributions.

After adjusting for government transfers and taxes, the Gini coefficient fell further to 0.398 for last year. “This reflected the redistributive effect of government transfers,” said SingStat on Thursday.

The improvement on the inequality index comes as the median household income from work, among Singapore’s resident employed households, inched up by 1.4 per cent in nominal terms to S$9,425 in 2019, from S$9,293 a year ago. In real terms, there was a 1 per cent increase.

A resident employed household is headed by a Singapore citizen or permanent resident and has at least one working person.

Over the last five years, from 2014 to 2019, the median monthly household income from work of resident employed households grew 13 per cent cumulatively, or 2.5 per cent per annum in real terms.

Per household member, median monthly household income from work rose by 4.8 per cent in nominal terms to S$2,925 last year from S$2,792 in 2018, or 4.3 per cent in real terms.

From 2014 to 2019, median monthly household income per household member grew by 22.2 per cent cumulatively, or 4.1 per cent per annum in real terms.

Meanwhile, resident employed households in all income groups registered real growth in average household income from work per household member last year. Those in the first to 90th percentile income groups saw real growth of 3.5 to 5.6 per cent, higher than the 0.4 per cent real growth for households in the top 10 per cent income group.

Resident households – including those with no working person – received S$4,682 per household member on average from government schemes in 2019, SingStat said.

In particular, resident households in one and two-room HDB flats received S$10,548 per member on average during the year, more than double the transfers received by those living in other dwelling types.