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.
Israel Median Household Income Highlights in 2021
Israel median household income (PPP) hit $41,050 in 2021, an increase of 3.1% over the previous year. Between 2015 to 2021, Israel’s median household income (PPP) increased by 16.8%.
Poverty and income inequality are the major challenges that the country faces in terms of its future development. The country’s Gini coefficient (a measure of income disparity, with zero corresponding to complete equality and one to extreme inequality) was an average of 0.38 for 2018. According to the UNDP, Human Development Report (2020), it was ranked 19th out of 189 countries.
Recent trends influencing the 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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