CBS: Income Inequality

Of the three Caribbean islands, Saba had the lowest income inequality in 2014. According to Statistics Netherlands (CBS), the distribution of incomes on Saba has become less uneven since 2011. On Bonaire and St Eustatius income inequality has hardly changed since 2011.

In 2011, Bonaire had the lowest income inequality of the three islands. The Gini coefficient stood at 0.39. The Gini coefficients on Saba and St Eustatius were marginally higher. Since 2011, income inequality on Bonaire and St Eustatius has remained almost unchanged, but Saba’s Gini coefficient fell to 0.35 in 2014. This was partly due to an additional increase of social benefits and minimum wages in that year.

Internationally, the Gini coefficient is the most frequently used instrument to measure income inequality expressed as a value between 0 (all households have the same income) and 1 (one household has all income and the rest of the households have no income).

By way of comparison: the Gini coefficient for the Netherlands was 0.29 in 2014, but within smaller geographical units, such as municipalities, differences may be larger. In 2013, the Gini coefficient ranged from 0.22 to 0.44. Amsterdam, for example, had a Gini coefficient of 0.36, while the municipality of Wassenaar had the highest income inequality.

Income distribution according to Pen’s parade

Pen’s income parade is a graphic representation of income distribution. The duration of Pen’s parade is one hour, during which all households in an economy pass by as marchers with their height proportional to their income and ordered from lowest to highest. The average-income household has a height of 1.70 m, i.e. the average height of residents of the Caribbean Netherlands in 2013. Households with incomes below average are smaller, low-income households are depicted as dwarves, high-income households as giants.

On Bonaire (situation in 2014), the first marchers are not visible because these households suffer losses and have a negative income. Subsequently, the spectator will see a parade of dwarves, representing households living on low incomes, relatively often depending on benefits and pensions. After exactly 30 minutes, the household with the median income (16.7 thousand dollars) will appear. The average-income (20.7 thousand dollars) household is not yet visible by then. Due to the skewed income distribution on Bonaire, the average-income household does not appear until in the 38th minute. In most households that follow, the main breadwinners are employees or entrepreneurs.

The median incomes on St Eustatius and Saba were 18.7 thousand and 18.6 thousand dollars respectively. The average incomes on both islands (23 thousand dollars on St Eustatius and 21.9 thousand dollars on Saba) show up in the 37th minute. The giants on St Eustatius and Saba appear in de 60th minute are more than 7.5 metres and almost 6 metres tall respectively. The giants on Bonaire had an average height in excess of 9 metres.

This is the first time CBS publishes data on income inequality in the Caribbean Netherlands.

Pen’s income parade

The basis for the calculation of Pen’s parade and the Gini coefficient is the standardised disposable income. The disposable household income is adjusted for differences in the number of family members and the composition of the household.

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