Income

Background

While money may not buy happiness, it is an important means to achieving higher living standards and thus greater well-being. Higher economic wealth may also improve access to quality education, health care and housing.

Household net adjusted disposable income

Household net adjusted disposable income is the amount of money that a household earns, or gains, each year after taxes and transfers. It represents the money available to a household for spending on goods or services. 

Household adjusted disposable income includes income from economic activity (wages and salaries; profits of self-employed business owners), property income (dividends, interests and rents), social benefits in cash (retirement pensions, unemployment benefits, family allowances, basic income support, etc.), and social transfers in kind (goods and services such as health care, education and housing, received either free of charge or at reduced prices). Across the OECD, the average household net adjusted disposable income per capita is USD 30 563 a year.

Household net wealth

Household net wealth considers the total wealth of both financial and non-financial and net of liabilities (e.g. loans) held by households.. Household net wealth takes into account: savings, monetary gold, currency and deposits, stocks, securities and loans, as well as the principle residence, other real estate properties, vehicles, valuables and other non-financial assets (e.g. other consumer durables).

Household net wealth makes up an important part of a household’s economic resources, and can protect from economic hardship and vulnerability. For example, a low-income household having above-average wealth will be better off than a low-income household with no wealth at all. Across the OECD, the average household net wealth is estimated at USD 409 880.

The cost of living is taken into account in income and wealth figures as the reported values are adjusted by Purchasing Power Parities (PPPs). PPPs reflect the differences in cost of living for a comparable amount of goods and services consumed by households.

Over the most recent years, households have enjoyed higher income on average and financial wealth has increased in many OECD countries. Despite the general increase in living standards, some groups have been left behind and inequality has also increased over the same period. On average in OECD countries, the average net-adjusted disposable income of the top 20% of the population is an estimated USD 69 477 a year, whereas the bottom 20% live on an estimated USD 11 026 a year. Some OECD countries such as Australia, Luxembourg and the United States, have a much more unequal income distribution than others.

For more information on estimates and years of reference, see FAQ section and BLI database.

 

Income in Detail by Country