KEY HOUSEHOLD INCOME TRENDS, 2010

1

Key Household Income Trends, 2010

I Introduction

1 This paper highlights the key trends in household income from work1 in

2010. The paper also presents the impact of the various government schemes on

household income in 2010.

II Household Income Growth

Household Income Increased in Tandem with Strong Economic Growth

2 Household income from work in 2010 increased in tandem with strong

economic growth. Median monthly household income from work in 2010

recovered to above the level before the economic downturn in 2009.

3 Among resident households2

, median monthly income from work

increased by 3.1 per cent from $4,850 in 2009 to $5,000 in 2010 (Table 1); in

real terms, the increase was 0.3 per cent3.

Table 1 Monthly Household Income from Work Among Resident Households

Year

Median Household Income Average Household Income

Dollar Nominal

Change (%)

Real

Change (%) Dollar

Nominal

Change (%)

Real

Change (%)

2000 3,638 3.9 2.6 4,988 5.7 4.2

2001 3,860 6.1 5.0 5,338 7.0 5.9

2002 3,628 -6.0 -5.6 5,069 -5.0 -4.7

2003 3,601 -0.7 -1.2 5,075 0.1 -0.4

2004 3,689 2.4 0.8 5,194 2.3 0.7

2005 3,860 4.6 4.1 5,447 4.9 4.4

2006 4,000 3.6 2.6 5,715 4.9 3.9

2007 4,375 9.4 7.1 6,295 10.1 7.9

2008 4,946 13.1 6.0 7,086 12.6 5.6

2009 4,850 -1.9 -2.5 6,826 -3.7 -4.2

2010 5,000 3.1 0.3 7,214 5.7 2.8

1 Household income from work refers to the sum of income received by all working members of the

household from employment and business but excludes the income of maids.

For statistical purposes, a household refers to a group of persons living in the same dwelling unit and

sharing common living arrangements. A household may comprise related or unrelated members.

2 Resident households refer to households headed by Singapore citizens or permanent residents.

3 The Consumer Price Index (CPI) is used as a deflator to compute real income changes in this paper.

2

4 Among employed households (households with at least one working

person), median monthly income from work increased by 5.7 per cent in

nominal terms (from $5,400 in 2009 to $5,700 in 2010) and 2.8 per cent in real

terms (Table 2).

Table 2 Monthly Household Income from Work Among Employed Households

Year

Median Household Income Average Household Income

Dollar Nominal

Change (%)

Real

Change (%) Dollar

Nominal

Change (%)

Real

Change (%)

2000 4,000 5.3 3.9 5,456 7.0 5.6

2001 4,141 3.5 2.5 5,736 5.1 4.1

2002 4,038 -2.5 -2.1 5,572 -2.9 -2.5

2003 4,050 0.3 -0.2 5,618 0.8 0.3

2004 4,106 1.4 -0.3 5,761 2.5 0.9

2005 4,345 5.8 5.3 6,052 5.1 4.6

2006 4,495 3.5 2.5 6,280 3.8 2.8

2007 4,883 8.6 6.4 6,889 9.7 7.4

2008 5,475 12.1 5.2 7,752 12.5 5.5

2009 5,398 -1.4 -2.0 7,549 -2.6 -3.2

2010 5,704 5.7 2.8 8,058 6.7 3.8

Highest Household Income Growth Among Smaller Housing Types

5 Median monthly household income from work increased by 10 per cent

(7.0 per cent in real terms) among employed households living in HDB 1- and

2-room flats, 6.5 per cent (3.6 per cent in real terms) among HDB 3-room flats,

5.3 per cent (2.4 per cent in real terms) among HDB 4-room or larger flats, and

3.0 per cent (0.2 per cent in real terms) among employed households living in

private properties (Table 3).

3

Table 3 Median Monthly Household Income from Work Among Employed Households by Housing Types

Median Monthly Household Income

Distribution

by Housing

Types, 2010

(%)

Dollar

Nominal

Change (%)

Real

Change (%)

2008 2009 2010

2008-

2009

2009-

2010

2008-

2009

2009-

2010

Total 5,475 5,398 5,704 -1.4 5.7 -2.0 2.8 100.0

HDB 1- & 2- Room 1,190 1,091 1,200 -8.3 10.0 -8.9 7.0 3.2

HDB 3-Room 3,230 3,193 3,401 -1.1 6.5 -1.7 3.6 18.8

HDB 4-Room or Larger 5,599 5,556 5,850 -0.8 5.3 -1.3 2.4 60.0

Private Flats, Condominiums

or Private Houses 12,568 12,502 12,877 -0.5 3.0 -1.1 0.2 17.0

Increase in Household Income for All Income Groups

6 For the following analysis on household income by income groups, all

employed households were ranked by their monthly household income from

work per household member in ascending order and divided into ten equal

groups or deciles4.

7 Employed households enjoyed real income growth across all groups in

2010. Employed households in the 11th – 50

th percentiles experienced the

highest increase in real terms, ranging from 5.4 – 7.5 per cent, followed by 4.9

per cent by the lowest 10% and 4.1 per cent by the top 10% (Table 4).

Employed households in the 51st – 90

th percentiles saw their average monthly

household income from work increase by 1.2 – 3.5 per cent in real terms.

4 Since the household income data cover only income from work, employed households are used in the

analysis of income of households in different income groups. Households with no working person could

have income from non-work sources.

4

Table 4 Average Monthly Household Income from Work

Among Employed Households by Deciles

Deciles 2008

($)

2009

($)

2010

($)

Nominal

Annual Change (%)

Real

Annual Change (%)

2008 2009 2010 2008 2009 2010

Total 7,752 7,549 8,058 12.5 -2.6 6.7 5.5 -3.2 3.8

1st - 10

th 1,312 1,303 1,400 7.5 -0.7 7.4 -0.3 -2.8 4.9

11th

- 20th 2,479 2,459 2,681 10.8 -0.8 9.0 2.8 -2.9 6.4

21st - 30

th 3,425 3,472 3,757 12.7 1.4 8.2 5.8 0.5 5.4

31st

- 40th 4,426 4,424 4,886 11.4 0.0 10.4 4.5 -0.9 7.5

41st - 50

th 5,456 5,354 5,888 11.3 -1.9 10.0 4.4 -2.7 7.1

51st - 60

th 6,732 6,599 7,016 14.4 -2.0 6.3 7.4 -2.8 3.5

61st - 70

th 8,038 7,969 8,358 12.6 -0.9 4.9 5.7 -1.7 2.1

71st - 80

th 9,720 9,559 10,095 11.4 -1.7 5.6 4.6 -2.5 2.8

81st - 90

th 12,914 12,290 12,818 14.0 -4.8 4.3 7.4 -4.7 1.2

91st - 100

th 23,023 22,062 23,684 12.6 -4.2 7.4 6.1 -4.0 4.1

8 To account for the change in household size over time, household income

from work is divided by the total number of members in the household to derive

the household income per household member.

9 Average monthly household income from work per household member

increased in real terms by more than 3.0 per cent for all income groups (Table

5). The increase was bigger for employed households in the 11th – 40

th

percentile and the top 10%, ranging from 5.0 to 5.3 per cent in real terms in

2010. Among employed households in the 41st – 90

th percentile and the lowest

10%, the increase ranged from 3.4 to 4.3 per cent in real terms.

5

Table 5 Average Monthly Household Income from Work Per Household Member

Among Employed Households by Deciles

Deciles 2008

($)

2009

($)

2010

($)

Nominal

Annual Change (%)

Real

Annual Change (%)

2008 2009 2010 2008 2009 2010

Total 2,382 2,326 2,500 9.9 -2.4 7.5 3.1 -2.9 4.5

1st - 10

th 340 334 354 9.3 -1.8 6.0 1.4 -3.8 3.5

11th

- 20th 630 626 675 10.5 -0.6 7.8 2.5 -2.7 5.3

21st - 30

th 883 872 940 11.8 -1.2 7.8 4.9 -2.1 5.0

31st- 40

th 1,141 1,122 1,210 12.2 -1.7 7.8 5.3 -2.5 5.0

41st - 50

th 1,424 1,409 1,506 12.2 -1.1 6.9 5.3 -1.9 4.1

51st - 60

th 1,761 1,739 1,853 12.2 -1.2 6.6 5.3 -2.1 3.7

61st - 70

th 2,209 2,164 2,298 12.1 -2.0 6.2 5.2 -2.9 3.4

71st - 80

th 2,831 2,759 2,937 11.6 -2.5 6.5 4.8 -3.4 3.6

81st - 90

th 3,904 3,770 4,055 11.4 -3.4 7.6 4.9 -3.3 4.3

91st - 100

th 8,700 8,463 9,174 6.9 -2.7 8.4 0.7 -2.6 5.1

III Government Benefits Received by Households

10 Over the years, Singapore has introduced various schemes such as GST

Credits, Senior Citizen Bonus and rebates on utilities, rental and service and

conservancy charges.

11 On average, the various government schemes added $1,110 per

household member to resident households in 2010 (Table 6). The various

government schemes gave a larger boost to those staying in smaller housing

types. Resident households in HDB 1- and 2-room flats received an average of

$2,650 per household member while resident households in HDB 3-room flats

received an average of $1,480 per household member. This was higher than the

$530 per household member for households in private properties.

6

Table 6 Average Annual Household Income from Work and Government Benefits1, 2

Received

Per Household Member Among Resident Households by Housing Types, 2010

Dollar

Among All Resident Households

(Per Household Member) Total

HDB

1- & 2-

Room

HDB

3-room

HDB

4-room or

Larger

Private Flats,

Condominiums or

Private Houses

2010

Annual Household Income from Work

Per Household Member 26,863 6,111 17,710 22,932 56,317

Government Benefits 1,112 2,647 1,479 1,042 525

As % of Annual Household Income from

Work Per Household Member 4.1 43.3 8.4 4.5 0.9

1 Refer to glossary for the government benefits that were included in this paper.

2 Data on government benefits are preliminary.

12 Government schemes also added more to households with no working

persons (on per household member basis) than employed households. Resident

households with no working persons received $2,180 per household member on

average from government schemes in 2010 (Table 7). In comparison, employed

households received $990 per household member on average from the various

government schemes.

Table 7 Average Annual Government Benefits

1,2 Received Per Household Member

Among Resident Households by Number of Working Persons and Housing Types, 2010

Dollar

Total

HDB

1- & 2-

Room

HDB

3-Room

HDB

4-Room or

Larger

Private Flats,

Condominiums or

Private Houses

Government Benefits

All Households 1,112 2,647 1,479 1,042 525

Households with No Working Persons 2,182 3,690 2,480 1,816 966

‘Retiree’ households3 2,723 4,163 2,844 2,385 1,343

Households with at least 1 Working

Person (Employed households) 987 2,021 1,289 988 477

1 Refer to glossary for the government benefits that were included in this paper.

2 Data on government benefits are preliminary.

3

Retiree households are defined, for statistical purposes, as those comprising solely non-working persons aged 60

years and over.

7

0.444

0.456 0.4570.460

0.464

0.470

0.476

0.489

0.4810.478

0.480

0.4300.433

0.428

0.4420.445

0.449

0.443

0.466

0.4480.448

0.4520.442

0.453 0.454 0.4560.460

0.4650.470

0.482

0.4740.471 0.472

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Based on Original Income from Work per Household Member

Based on Income from Work per Household Member

After Accounting for employer CPF contributions

Based on Income from Work per Household Member

After Accounting for Government Benefits and Taxes2,3 and

employer CPF contributions

IV Household Income Distribution

13 The disparity in household income from work per household member

among employed households increased marginally in 2010. The Gini coefficient,

which is a summary measure of income inequality, increased slightly in 2010.

In particular, including employer CPF contributions5, the Gini coefficient was

0.472 in 2010, compared to 0.471 in 2009 (Chart 1). Adjusting in addition for

government benefits and taxes, the Gini coefficient was 0.452 in 2010.

Chart 1 Gini Coefficient

1 Among Employed Households

1 The Gini coefficient takes values from zero to one. The more unequal the income distribution, the larger is the Gini coefficient.

2 Refer to glossary for the government benefits and taxes that were included in this paper.

3 Data on income after accounting for government benefits and taxes for 2010 are preliminary.

4 Based on original household income from work per household member.

5 Employer CPF contributions are paid into employees’ own accounts.

Ratio of Average Income4 of

Top 20% to Lowest 20%

Employed Households

10.1 11.1 11.3 11.5 11.7 12.3 12.4 13.2 13.0 12.7 12.9

8

V Concluding Remarks

14 Household income from work increased in both nominal and real terms in

2010 in tandem with the economic recovery. Households in smaller housing

types experienced the highest growth in household income. Average monthly

household income from work per household member also increased for all

income groups.

15 The Gini coefficient increased slightly in 2010, but was lower than the

peak in 2007.

16 The provision of the government’s various schemes improved the income

situation of households especially those in lower income groups, and served to

reduce household income disparities, resulting in a lower Gini coefficient after

these adjustments.

SINGAPORE DEPARTMENT OF STATISTICS

FEBRUARY 2011

♦ Based on Original Income from Work per

Household Member

Based on Income from Work per Household Member After Accounting for Government Benefits2 and Taxes3,4

9

Glossary of Terms and Definitions

Resident households

Resident households refer to households headed by Singapore citizens or

permanent residents.

Employed households

Employed households refer to resident households with at least one working

person.

Retiree households

Retiree households are defined, for statistical purposes, as those comprising

solely non-working persons aged 60 years and over.

Household income from work

Household income from work refers to the sum of income received by working

members of the household from employment and business. However, it does

not include the income of maids.

Household income from work per household member

Household income from work per household member refers to the household

income from work divided by the total number of members in the household.

For example, if only one person in a household of four is working, his income is

divided by four to derive the average income per household member.

Median Household Income

Median household income refers to the household income in the middle of the

income distribution, i.e. half of the households have higher income than the

median household income and half have lower income than the median

household income.

Decile (decile group)

A decile group is one tenth of all households arranged by their incomes from

minimum to maximum. The first decile group is the first one tenth (the 10% of

all household with lowest incomes). The last decile is the one tenth of the

households with the highest incomes.

10

Gini Coefficient

The Gini coefficient measures the degree of inequality of the income

distribution. It is equal to zero in the case of total income equality and to one in

the case of total inequality.

Government Benefits and Taxes

Government benefits include the following in relevant years

a) New Singapore Shares and Economic Restructuring Shares, Growth

Dividends, NS Bonus, GST Credits, Senior Citizen Bonus and Top-

Ups to CPF Accounts;

b) Re-Employment Support Scheme, Workfare Bonus and Workfare

Income Supplement disbursements;

c) Rebates on utilities, rental and service and conservancy charges;

d) Schemes relating to education, such as Edusave Pupil Fund,

Edusave Merit Bursary, Edusave Awards and Edusave Scholarships

for Government or Government Aided Schools. Also include MOE

Financial Assistance Scheme from 2006 onwards, Post-Secondary

Education Accounts Top-up and government’s matching grant from

2008 onwards;

e) Schemes relating to healthcare, such as subsidies for medical bills

incurred at A&E, day surgery, hospitalisation episodes from 2002

onwards. From 2006, also include subsidies for medical bills

incurred at specialist outpatient clinics and polyclinics, and Medifund

disbursements;

f) Baby Bonus from 2001 onwards, Centre-based Infant and Childcare

subsidies from 2002 onwards, and schemes relating to ComCare

programmes from 2004 onwards;

g) CPF Deferment Bonus from 2008 onwards, CPF Life Bonus and

Voluntary Deferment Bonus from 2009 onwards;

h) Income tax rebates and property tax rebates.

Taxes include income tax and indirect taxes. Indirect taxes include GST, maid

levy, car-related taxes, alcohol tax, tobacco tax, water conservation tax and

property tax.

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