Median Household Income Overview
The indicator refers to the median income of a household in a country. Median household income divides households into two equal segments, such that the first half earns less than the median income while the second half earns more. The median income is defined in PPP (Purchasing Power Parity, in Current International Dollars) terms to avoid exchange rate fluctuations due to inflationary tendencies across countries. The median income level is generally accepted as a better indication of well-being or actual income distribution as it is not skewed by disproportionate data.
According to Global Data, the top ten countries with the highest median household income in the world are Singapore, Iceland, Norway, Sweden, Ireland, Luxembourg, Belgium, the United States, Cyprus, and Australia. The average median household income (PPP) was $40,094 in 2021.
France Median Household Income Highlights in 2021
France’s median household income (PPP) hit $61,020 in 2021, an increase of 1.2% over the previous year. Between 2010 to 2021, France’s median household income (PPP) increased by 6.6%.
According to Eurostat, the Gini coefficient (a measure of income inequality) of household disposable income stood at 29.2 in 2019, increasing from 27.7 in 2005. A Gini coefficient score of zero corresponds to complete equality while a score of 100 corresponds to complete inequality. However, during the eurozone crisis period during 2007-2011, the Gini coefficient of household disposable income increased, and limited progress has been made since to reduce inequality in the country.
Rising inequality creates political, social, and economic challenges, and stifles upward social mobility. The ongoing yellow vest protests which started in November 2018 are in part due to increased inequality, disproportionate tax rates on the middle classes, and high costs of living.
The “yellow vest” movement has focused on rising income inequality in France and led to promised minimum wage rises and tax concessions by President Macron.
Recent trends influencing Global Economic Growth
Increased COVID-19 impact:
As a result of Omicron, a new variant of COVID-19, more cases have been reported worldwide, resulting in the disruption of supply chain management. However, the global vaccination drive has reduced the fatality rate from the coronavirus.
Rising Inflation and Interest Rates:
As a result of rising inflation rates in both developing and advanced economies, central banks have been forced to tighten monetary policy and raise interest rates to keep prices from rising. However, a steady increase in interest rates could cause financial distress in some economies.
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