Article

Why we should be concerned about increased wealth inequality in Spain

Diederik Boertien, Centre d'Estudis Demogràfics (CED) - CERCA

Wealth inequality is increasing around the globe, and Spain is no exception. Wealth refers to the total value of assets minus the total value of debts of a household. Increasing wealth inequality is likely to have more severe consequences for well-being in Spain compared to other countries. High unemployment, relatively low earnings and limited social security make wealth an essential resource for the economic survival of many Spanish households. Whereas the share of low-income households with some wealth in Spain was relatively high two decades ago, this number has decreased considerably over time. Policies addressing economic inequality will have to consider how to compensate for the erosion of wealth among the economically weakest.
Key points
  • 1
       The share of wealth owned by the wealthiest 10% of Spanish households rose from 43% to 54% between 2002 and 2017.
  • 2
       The share of individuals living in households that had debt increased from 3% to 9%.
  • 3
       Especially individuals in low-income households were increasingly likely to have no wealth or have debt. estar endeudados.
  • 4
       Among individuals living in low-income households, only 42% had at least €1000 available to make payments in 2017, compared to 54% in 2002.
  • 5
       In Spain, where wealth is often needed to compensate for income losses, this trend is likely to lead to severe economic deprivation.

Households often rely on their wealth when they experience events that lead to unexpected costs or the loss of income. Low-income households are more likely to experience such events, such as unemployment or sickness. Therefore, the amount of wealth that low-income households hold is an important determinant of the experience of economic deprivation in society. Graph 1 shows that wealth increased and then decreased across income groups, with lower-income households having less wealth at the end of the study period than at the beginning. The article shows that in 2017 an increasing share of individuals living in low-income households had no wealth or were in debt. The authors investigate this trend and discuss the possibly severe consequences for the economic well-being of households in Spain. 

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