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Big changes are happening behind the scenes of the seemingly stable income inequality in the Netherlands. Over the past 40 years, income inequality has increased but at a slower rate, largely due to the increased participation of women in lower income groups in the workforce.
Meanwhile, the income of men has seen very little growth over this period. This is the key finding of a study conducted by Egbert Jongen and Heike Vethaak from Leiden University on behalf of the FNV.
Men’s income more unequal, women’s more equal
Between 1981 and 2021, income inequality in the Netherlands has increased by 12%, with 5% of this increase occurring over the past decade. This rise is lower compared to that of Anglo-Saxon countries. However, when breaking down the figures into higher and lower income groups, significant differences are revealed.
Inequality between men’s incomes has considerably increased, while inequality between women’s incomes has decreased significantly. This is largely due to the greater participation of women from lower-income groups in the workforce. Notably, the disposable income of the top 1% has increased the most, partly due to tax relief over the past 10 years.
“Had it not been for the increased participation of women from lower-income groups in the workforce, income inequality in the Netherlands would have grown much more,” says Jongen. The study also notes that unemployment and illness were more common reasons for not working among lower-income individuals, where the number of people with permanent employment contracts has declined the most.
“These results hold an important message for the political parties involved in the coalition talks: low-income earners have faced increasingly precarious contracts, stagnant or declining wages, and more illnesses, which have forced them to make very different choices,” says Kitty Jong of the Federation of Dutch Trade Unions (FNV). “This study clearly indicates there is no more room for further pressure on people’s livelihoods.”
Increase in material wealth mainly due to more women working
According to the analysis, the average household disposable income has increased by 1.1% per year between 1981 and 2021. This increase is mainly attributed to the rise in women’s income, growing at a rate of 3.4% per year as compared to only 0.3% for men. The increase in women’s income is primarily due to their increased labor force participation, which has seen a 2% increase per year over the past 40 years, with working women also putting in 0.8% more hours per week over the last two decades.
“The disposable income of people has mainly risen due to the increased participation of women in the workforce,” explains researcher Heike Vethaak. “However, this has also resulted in less time available for informal care, for example.”
Jongen and Vethaak also found that changes in family structure vary significantly between lower and higher income groups. “The rise in the percentage of single individuals and single parents, as well as the decrease in the number of children, is concentrated in the lowest income groups.