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.
Italy’s Median Household Income Highlights in 2021
Italy’s median household income hit (PPP) $35,189 in 2021, an increase of 1.0% over the previous year. Between 2010 to 2021, Italy’s median household income decreased by 1.9%.
High inequality of income amongst the Italian population is a concern. According to Eurostat, as of 2019, Italy’s Gini Coefficient of equalized disposable income (a measure of inequality in income) was 32.8, which is one of the highest amongst EU nations. A Gini coefficient score of zero corresponds to complete equality while a score of 100 corresponds to complete inequality. According to the World Bank, the income share held by the wealthiest 10% of people in Italy was 26.7% in 2017, while the poorest 10% of the population accounted for only 1.9% share of total income for the same year.
In Italy, income inequality within regions is inversely related to the level of wealth per inhabitant, and the poorest regions have the largest income gaps between the top 20% and bottom 20% of earning members in the region.
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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