Where fi­nan­cial in­equal­ity is ram­pant

Financial Mirror (Cyprus) - - WORLD -

There is in­creas­ing recog­ni­tion that GDP mea­sures or GDP per capita are in­suf­fi­cient when it comes to un­der­stand­ing the true eco­nomic well-be­ing of house­holds. That has re­sulted in re­search be­com­ing in­creas­ingly fo­cused on house­hold in­come with a higher em­pha­sis on in­come in­equal­ity. A re­cent OECD pa­per an­a­lyzed the dis­tri­bu­tion of house­hold wealth across 28 coun­tries and it found that wealth in­equal­ity is twice the level of in­come in­equal­ity on av­er­age.

One of its key find­ings was that the wealth­i­est 10% of house­holds hold 52% of to­tal house­hold wealth on av­er­age. By con­trast, the 60% least wealthy house­holds only own about 12%. The sit­u­a­tion is by far the worst in the United States where the rich­est 10% of house­holds own 79% of the wealth. The bot­tom 60% of Amer­i­can house­holds only own 2.4% of house­hold wealth.

The sit­u­a­tion

is the same in Europe where of house­holds is neg­a­tive, mean­ing that on av­er­age, they have li­a­bil­i­ties ex­ceed­ing the value of their as­sets. (Source: Statista)

the in­equal­ity gap is par­tic­u­larly wide in some coun­tries. In the Nether­lands, 68% of wealth is owned by the top 10% of house­holds while in Den­mark, the fig­ure is 64%. The OECD found that in both coun­tries, the share of wealth held by the bot­tom 60%

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