To measure living standards, the most relevant concept is disposable income. Disposable income consists of income after direct taxes have been subtracted (e.g. income tax) and after social transfers have been added (e.g. pensions and various benefits) and it is available to households to consume or save.

The next graph shows the evolution of median annual disposable income per person. Median income is the level of income that is at the middle of the income distribution, i.e. where 50% of people have higher disposable income and 50% have lower disposable income.

The next graph shows the evolution of median annual disposable income per capita, separately for each age group.

The next graph shows the evolution of median annual disposable income per person, separately for each education level.

The next graph shows the evolution of median annual disposable income per person for households with different composition of members.

There are many different ways to measure income inequality. The Gini index is one of the most common metrics. The Gini index takes the value of 0 when there is perfect equality and the value of 100 when there is maximal inequality.

The next graph shows the evolution of inequality in after-tax income depending on whether government transfers to households (pensions and other social transfers) are included or not.

A different way to measure inequality is to compute the share of income that is received by each quintile (20%) of households. The first quintile consists of the poorest 20% of households, the second quintile consists of the second-poorest 20% and so on until the fifth quintile which consists of the richest 20% of households.

The next graph shows the share of disposable income that is received by each of the 5 quintiles of households and the income cut-off that separates each quintile. The poorest quintile receives only around 6-7% of total income while the richest quintile receives more than 40% of total income.

The ratio of the income share of the richest and the poorest quintiles (Q5/Q1) provides a measure of inequality between the top and the bottom of the income distribution (top-bottom inequality). The ratio of the income share of the richest and the middle quintiles (Q5/Q3) provides a measure of inequality between the top and the middle of the income distribution (top inequality). The ratio between the income share of the middle quintile and the poorest quintile (Q3/Q1) provides a measure of inequality between the middle and the bottom of the income distribution (bottom inequality).

The next graphs shows the evolution of top-bottom inequality, top inequality and bottom inequality.

Taxes and social transfers (pensions, benefits, etc.) reduce inequality: taxes tend to be proportionally higher at the top of the income distribution and social transfers tend to be proportionally higher at the bottom of the income distribution. The next graph presents the evolution of top-down inequality (Q5/Q1) in gross market income (before taxes and social transfers) and in disposable income (after taxes and social transfers). The difference between the two is the effect of taxes and social transfers.

The next graph presents the evolution of top-bottom inequality (Q5/Q1) in each region.