Between January and July 2015 interviews were conducted for the Survey of Household Income and Wealth (SHIW) for the year 2014. The sampling design remained the same as in the previous issues of the survey, with 8,156 households being interviewed. The households were picked from the registry offices of 371 municipalities; they comprise 19,366 individuals, of which 13,533 are income earners. Compared with last year, the main questionnaire has remained more or less the same. The single-topic sections focused on workers’ choice between employment in the public or the private sector, the decision to start one’s own business, and inheritances and donations. Some new questions were introduced, focusing on the past or future impact of recent economic policy measures and of local tax reform.
In 2014 mean annual net household income was approximately €30,500. In the years between 2012 and 2014, the downward trend that had been under way since 2008 came to an end. This was mainly due to a reduction in earnings in both payroll- and self-employment. Equivalent income, a measure of the level of individual welfare that takes into account family structure, continued to decrease, albeit at a slower pace than in the previous years, owing, among other factors, to an increase in the average size of households for the first time since the early 1980s.
In 2014 some 22.3 per cent of individuals had an equivalent income of less than 60 per cent of the median income (€16,000), the commonly used threshold to define the condition of having a low income. The figure was 19.6 per cent in 2006 and 20.6 per cent in 2012. From 2006 onwards the share of low-income individuals rose in the central age groups up to age 54, but fell for the older age groups owing to the greater stability in their earnings at a time where the general picture points to a widespread drop in income. The Gini index of equivalent income, a measure of inequality, remained at the levels of 2012.
Between May and December 2014 payroll employees with a total annual income of between, approximately, €8,100 and €26,000, benefited from the monthly bonus provided for in Decree Law 66/2014. Slightly more than one fifth of Italian households reported receiving the bonus, which amounted to an average €86 per month. Because of how the bonus was designed, i.e. tied to individuals’ payroll earnings, households with more than one source of income have, on average, benefited more than households with only one source of income. The households that reported receiving the bonus also reported spending, on average, 90 per cent of it.
At the end of 2014 Italian households’ net wealth averaged €218,000. The wealth held by the poorest 30 per cent of Italian households (€7,000 on average) represented less than 1 per cent of total wealth. Conversely, the richest 5 per cent of households, with an average wealth of €1,300,000, accounted for over 30 per cent of total wealth. A large share of households’ wealth consists of their main place of residence.
Between 2012 and 2014 households’ average net wealth declined by 11 per cent in real terms owing to a significant drop affecting the wealthiest households (-15 per cent for the top quintile) which was largely due to a decrease in real estate prices. For households whose wealth is below the median, the average net wealth increased by 4 per cent, and this was almost entirely due to a decline in financial liabilities reflecting both the lower average exposure of borrowers and the lower number of borrowers. The Gini index of net wealth went down by three percentage points to 61 per cent.
Financial vulnerability, identified by the simultaneous presence of loan instalments of more than 30 per cent of income and a monetary income below the median, affects 11.4 per cent of indebted households and 2 per cent of total households. In 2012 the figures were 13.5 per cent and 2.6 per cent, respectively.
The long-term outlook
Between 1977, the first year for which the elementary data for this survey are available, and 2014, the average equivalent income (net of earnings from financial assets, which only started to be surveyed in 1987) rose by about 35 per cent in real terms. The fall recorded between 2010 and 2012 brought the indicator back to the levels of the late 1980s.
Between 1995, when the way the data were collected was firmly established, mean net household wealth increased by approximately 8 percentage points in real terms. The median value increased by twice as much. The share of total net wealth owned by the richest 5 per cent of households remained stable at around 30 per cent, a proportion similar to that held by three quarters of the less well-off household.