Archive:The EU in the world - living conditions

This Statistics Explained online publication has been archived. The latest edition, Key figures on the EU in the world – 2023 edition, can be found on the Eurostat website.

Data extracted in January and February 2020.

Planned article update: February 2023.

Highlights

The overall poverty rate was lower in the EU in 2017 than for any of the other G20 members.

The widest inequalities in income distribution in 2017 among the G20 members were recorded in South Africa, while the EU and the United Kingdom had the most equitable distributions.

Poverty rate, 2017
(%)
Source: Eurostat (ilc_li02) and the OECD (Income distribution and poverty)

This article is part of a set of statistical articles based on Eurostat’s publication The EU in the world 2020. It focuses on living conditions and social protection in the European Union (EU) and the 16 non-EU members of the Group of Twenty (G20). The article covers indicators related to household composition, income, expenditure, social protection and poverty and gives an insight into societal developments in the EU in comparison with (most of) the major economies in the rest of the world, such as its counterparts in the so-called Triad — Japan and the United States — and the BRICS composed of Brazil, Russia, India, China and South Africa.

Full article

Households

Nearly half of all Indian households were composed of five or more persons, compared with just 6.2 % of all households in the EU-27

Many statistical analyses of social and living conditions focus on households, in other words a person or group of persons living together (but separate from others), regardless of whether they are family members or not. Many factors influence household formation, for example, marriage, divorce, fertility and life expectancy, as well as geographical mobility, economic and cultural factors.

Many countries compile detailed information on households every 5 or 10 years, through a census or inter census survey and so the most recent data on household composition for several G20 members often refers to a reference year around 2010 or 2015. Figure 1 shows that more than one quarter of all households in Japan (2015 data), the EU-27 (2018 data), the United Kingdom (2018 data), Canada (2016 data), South Korea (2015 data), the United States (2010 data) and Russia (2010 data) were single person households, whereas this was the case for less than one tenth of all households in Mexico (2010 data), Indonesia (2010 data) and India (2011 data). Households composed of five or more persons were relatively uncommon in the United Kingdom, the EU-27, South Korea, Japan, Canada and Russia, all reporting that less than one tenth of households were this large; by contrast, nearly half (49.5 %) of all Indian households were composed of at least five people.

Figure 1: Households by the number of household members
(% of total)
Source: Eurostat (ilc_lvph03), the United Nations Department of Economic and Social Affairs, Statistics Division (Demographic Statistics; Demographic and Social Statistics) and national surveys

In Brazil (2014 data) and China (2010 data), single person households and large households were both relatively uncommon, with more than two thirds of all households composed of two to four people, as was nearly the case in South Korea despite its relatively high share of single person households.

Figure 2 presents a similar analysis focusing on types of households rather than a simple count of the number of household members. In 2018, one third (32.8 %) of private households in the EU-27 were composed of a single person (normally an adult) living alone and more than one quarter (28.8 %) were composed of two adults living without children (see Figure 2). The combined share of households composed of a single person or two adults living without children was 61.6 % in the EU-27, the same share as in the United Kingdom and this was higher than in any of the other G20 members, the next highest cumulative share being 54.9 % in the United States. Consequently, the combined share of households composed of a single person with children and households composed of two adults with children in the EU-27 was relatively low, at 25.4 %, lower than in any of the non-EU G20 members. By contrast, these two common types of household with children made up more than half of all households in Mexico (55.1 %) and Brazil (51.6 %).

Figure 2: Types of households, 2010
(% of total)
Source: Eurostat (ilc_lvph02), the United Nations Department of Economic and Social Affairs, Statistics Division (Demographic Statistics; Demographic and Social Statistics) and national surveys

Social protection expenditure

Social protection encompasses all actions by public or private bodies intended to relieve households and individuals from the burden of a defined set of risks or needs. Figure 3 shows the level of social protection expenditure relative to gross domestic product (GDP) for the G20 members in 2007 and 2017. The EU-27 recorded the highest expenditure on social protection (using this measure) in 2017 (28.2 % of GDP), ahead of the United Kingdom and Japan (2015 data) which were the only other G20 members with ratios above 20 %. Mexico recorded social protection expenditure of 7.5 % (2016 data), the lowest among the non-EU G20 members. In these eight countries, social protection expenditure relative to GDP increased between the years shown in Figure 3, as it also did in the EU-27. The largest increases in percentage point terms were in Japan (4.2 points; 2007-2015), South Korea (3.5 points) and the United States (3.0 points).

Figure 3: Public expenditure on social protection, 2007 and 2017
(% of GDP)
Source: Eurostat (spr_exp_sum) and the OECD (Social expenditure database)

Household income

Across the G20, the widest inequalities in income distribution were recorded in South Africa, while the EU-27 and the United Kingdom had the most equitable distributions

Figure 4 presents the distribution of income based on income shares, showing the proportion of all income received by the 20 % of the population with the highest incomes (the top or highest quintile), the proportion received by the 20 % of the population with the lowest incomes (the bottom or lowest quintile), and the proportion received by the three intermediate quintiles.The proportion of income received by the highest quintile was just under two fifths (38.3 %) in the EU-27 in 2017; in all of the other G20 members this proportion exceeded two fifths. Mexico (2016 data) and Brazil reported that the highest quintile received more than half of all income, with this share even higher in South Africa, as the highest quintile accounted for more than two thirds (68.2 %; 2014 data) of all income.

Figure 4: Income quintile shares, 2017
(%)
Source: Eurostat (ilc_di01) and the World Bank (Poverty and Equity Database)

A commonly used measure for studying income distribution is the income quintile share ratio, which is calculated as the ratio of the proportion of income received by the highest quintile compared with the proportion received by the lowest quintile. Based on the data presented in Figure 4, this ratio ranged, among the G20 members, from 4.9 in the EU-27 and 5.4 in the United Kingdom to 9.4 in the United States (2016 data), with Mexico (11.1; 2016 data), Brazil (18.1) and South Africa (28.4; 2014 data) above this range.

The Gini coefficient is another measure of income distribution. It shows the extent to which the distribution of income deviates from a perfectly equal distribution. A coefficient of 0 expresses perfect equality where everyone has the same income, while a coefficient of 100 expresses full inequality where only one person has all the income.

In 2017, the EU-27 had a Gini coefficient of 30 which was lower than in any of the non-EU G20 members (see Figure 5). Elsewhere the United Kingdom, Australia (2014 data), Russia (2015 data), Indonesia and China (2016 data) also recorded coefficients below 40. The highest Gini coefficients among the G20 members were recorded in Brazil (53) and South Africa (63; 2014 data), confirming the relatively high inequality of income distribution observed through the income quintile share ratio.

Figure 5: Gini coefficient, 2017
(%)
Source: Eurostat (ilc_di12) and the World Bank (Poverty and Equity Database)

The overall poverty rate was lower in the EU-27 in 2017 than in any of the other G20 members

Figure 6 shows the proportion of people at risk of poverty (hereafter referred to as the poverty rate), calculated as the proportion of the population with an income (after taxes and transfers) below the poverty threshold, where the threshold is set in each country as 60 % of the median income level (again, after taxes and transfers). In 2017, the EU-27 had the lowest poverty rate among the G20 members, at 16.9 %. Other G20 members with a poverty rate around or below one fifth were the United Kingdom (17.0 %), Canada (19.0 %), Australia (19.9 %; 2016 data) and Russia (20.1 %; 2016 data), while the rate was one quarter or higher in the United States (25.0 %) and Turkey (25.2 %; 2015 data), and closer to one third in South Africa (32.0 %; 2015 data).

Figure 6: Poverty rate, 2017
(%)
Source: Eurostat (ilc_li02) and the OECD (Income distribution and poverty)

Among persons aged 65 years and over the poverty rate in the EU-27 was 14.7 % in 2017, therefore lower than the overall rate for the total population. This situation was quite unusual, in that the only other G20 members to record a lower poverty rate for older people (than for the total population) were South Africa and the United Kingdom, although the two rates were almost the same in the latter. Particularly large differences between the overall poverty rate and that for older people were observed in South Korea and Australia. As noted above, Australia had one of the lowest overall poverty rates among the G20 members but the second highest poverty rate for older people (41.8 %; 2016 data), lower only than in South Korea (52.2 %). The lowest poverty rates for older people were recorded in the EU-27 (14.7 %) and the United Kingdom (16.9 %).

Household expenditure

Across the G20 members, the share of total household expenditure on food, beverages and tobacco was particularly low in the United States

Household consumption expenditure is the expenditure made by households to acquire goods and services and includes payments of indirect taxes (VAT and excise duties). Figure 7 provides information on the distribution of household consumption expenditure for various purposes. Factors such as culture, income, weather, household composition, economic structure and degree of urbanisation can all potentially influence expenditure patterns. In most G20 members the highest proportion of expenditure was normally devoted to food, non-alcoholic beverages and tobacco on one hand or housing (including also expenditure for water and fuels) on the other. A notable exception to this general pattern was the United States where household expenditure on health had the highest share. The share of expenditure on food and non-alcoholic beverages was particularly low in the United States, as it was to a lesser extent in the United Kingdom, Canada and Australia.

Figure 7: Household consumption expenditure by category, 2018
(% of total household consumption expenditure)
Source: Eurostat (nama_10_co3_p3), the United Nations Department of Economic and Social Affairs, Statistics Division (National Accounts Official Country Data) and national household surveys

Figure 7 (continued): Household consumption expenditure by category, 2018
(% of total household consumption expenditure)
Source: Eurostat (nama_10_co3_p3), the United Nations Department of Economic and Social Affairs, Statistics Division (National Accounts Official Country Data) and national household surveys

Source data for tables and graphs

Living conditions: tables and figures

Data sources

The statistical data in this article were extracted during January and February 2020.

The indicators are often compiled according to international — sometimes worldwide — standards. Although most data are based on international concepts and definitions there may be certain discrepancies in the methods used to compile the data.

EU data

Most of the indicators presented for the EU and the United Kingdom have been drawn from Eurobase, Eurostat’s online database. Eurobase is updated regularly, so there may be differences between data appearing in this article and data that is subsequently downloaded. In exceptional cases some indicators for the EU and the United Kingdom have been extracted from international sources.

G20 members from the rest of the world

For the non-EU G20 members other than the United Kingdom, the data presented have been compiled by a number of international organisations, namely the OECD, the United Nations Department of Economic and Social Affairs, the United Nations Statistics Division, and the World Bank. For some of the indicators shown a range of international statistical sources are available, each with their own policies and practices concerning data management (for example, concerning data validation, correction of errors, estimation of missing data, and frequency of updating). In general, attempts have been made to use only one source for each indicator in order to provide a comparable dataset for G20 members.

Context

The data on living conditions and social protection shown in this article aim to provide a picture of the social situation covering indicators related to the composition of households, household income and expenditure, as well as social protection and poverty. The distribution of income is often used to measure inequalities in society. On the one hand, differences in income may provide an incentive to individuals to improve their situation (for example, through looking for a new job or acquiring new skills). On the other hand, crime, poverty and social exclusion are often linked to income inequalities.