Income in Iceland seems to have become less equal in the years 2003 to 2006 given the values of the Gini-index and the quintile share ratio. On the other hand the at-risk-of poverty rate has remained more or less the same during this period. The trend seems to be that the lowest income people seem to be in a similar position compared to the average person while the highest income people are receiving higher increase in income than the rest of the population.
The Gini-index, which shows the distribution of disposable income among people in private households in Iceland, was 28 in 2006. The index would be 100 if the one person had all the income of the country but 0 if everyone received equal income. The Gini-index has been growing every year from 2003 when it was 24.
When the 20% of persons receiving the highest disposable income are compared to the 20% with the lowest disposable income (quintile share ratio) in the year 2006 it can be seen that the highest income group has 3.9 times higher income than the lowest income group. The quintile share ratio has developed in a similar way as the Gini-index over the period between 2003 and 2006, going from 3.4 in 2003 to 3.9 in 2006.
Out of 29 European nations, Iceland ranked 15 to 16 when the nations were ordered from the lowest Gini-index to the highest. Iceland was 13 to 14 out of 29 when the quintile share ratio of the nations was ranked the same way. It seems that in the period between 2003 and 2006 the Gini-index and the quintile share ratio have increased more in Iceland than in most other European nations.
Out of 29 nations in 2006, Iceland was one of three nations with the lowest at-risk-of-poverty rate. The trend of this index differs from the other two since Iceland has consistently been among the lowest of the 29 European nations. This development might indicate that during the period 2003 to 2006 the income distribution in Iceland has become more unequal as those with the highest income have been increasing their income at a higher rate than the average person while those with the lowest income seem to be in a similar position relative to the median.
In the years 2003 to 2006 just below 10% of the population living in private households was at risk of poverty according to the EU-SILC definition. The at-risk-of-poverty threshold, set at 60% of median equivalised disposable income, was 126,000 ISK for persons living alone in 2006 and 264,500 ISK for two adults with two children. For age and gender the rate below the poverty threshold in the year 2006 is highest for women, age 18 to 24 or just over 15% and with women 65 and older, just below 19%. The rate below the threshold was lowest with people 50 to 64 years old, 5 to 6%.
Persons with a university degree are at lower risk of poverty than those with primary or secondary education, or 4.3%. The at-risk-of-poverty rate for persons with primary or secondary education was 7.5% and 8% respectively.
A relatively high proportion of single people, with or without children, are below the poverty threshold compared to other household types. The same can be said about those who rent their apartments compared to home owners.
Risk of poverty and income distribution 2003-2006 - Statistical Series