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.
pqDeberiapreocuparnosEN-06+%281%29.png

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. 

Classification

Tags

Subject areas

Related content

Article

How do people’s acquaintances shape their support for economic redistribution and social protection?

We analyse how opinions on economic redistribution and social protection depend not only on family incomes, but also on the wages earned by people in the immediate social environment.

Report

Job uncertainty and income redistribution preferences

The duality between temporary and permanent contracts conditions the labour market in Spain and causes differences in job security and income. What impact does this have on people’s redistribution preferences?

Report

Disability, inequality and income redistribution

What is the economic impact of disability? This report shows that households with at least one member with disability present lower income levels.

Report

Capital income and income inequality in Spain, 1980-2020

Why does Spain present income inequality levels higher than the European average? Differences in income between age groups and the concentration of capital among the richest groups are some of the causes.

Article

Inheritance Tax and Income Tax: how much should people pay?

An experimental analysis of the preferred tax rates for different types of taxes, across a variety of taxpayer income and inheritance assumptions, and taking into account people’s perception of their own position in income distribution.

You may also find interesting

Social welfare systems and inequality in Europe

Report

Social welfare systems and inequality in Europe


Social Inclusion

Spain’s social protection system is less redistributive than those of other EU countries. What reforms could help reduce economic inequality in Spain?

Detection of workplace bullying and its negative impact on psychological well-being

Article

Detection of workplace bullying and its negative impact on psychological well-being


Social Inclusion

11.2% of the population present a high probability of suffering a situation of harassment in their workplace and may develop generalised anxiety disorder. How can possible cases of psychological harassment be detected?

Technocratic attitudes in Spain during the pandemic

Article

Technocratic attitudes in Spain during the pandemic


Social Inclusion

In times of crisis, do citizens prefer to adopt a more technical type of government? According to this study, technocratic attitudes among Spanish people increased during the pandemic, especially among right-wing voters.