April 24, 2017

Middle Class Fortunes in Western Europe

Appendix E: Income distributions

The chart below shows the distribution of adults in the U.S. and selected countries from Western Europe by their household income. Adults in each country are divided into 51 groups with household incomes ranging from $0-4,999, $5,000-9,999, $10,000-14,999, and so on up to the highest income category of $250,000 or greater. Incomes in all countries are adjusted for household size, scaled to a household of three, and expressed in 2011 prices and purchasing power parities (see Methodology for more details).

The selected countries from Western Europe fall into three groups based on their income distributions. The first group consists of Ireland, Italy, Spain and the UK. These countries had among the lowest median household incomes, within the range from $30,000 to $40,000 in 2010, compared with $53,000 in the U.S. As shown in the chart, Ireland, Italy, Spain and the UK have notably higher concentrations of people than the U.S. in the lower tails of the income distributions.

The second group selected from Western Europe consists of Denmark, Finland, France, Germany and the Netherlands. The median disposable household income in these countries was inside the range of $40,000 to $45,000 in 2010. Compared with the U.S., these countries have similar concentrations of adults in the lower tails of the income distributions, but more pronounced peaks in the middle and relatively fewer adults in the upper reaches of the income distributions.

The final group selected from Western Europe is composed of Luxembourg, with a median disposable income of $65,000 in 2010, and Norway, with a median income of $52,000. Compared with the U.S., Luxembourg and Norway have relatively few adults in the lower ends of the income distributions and more in the middle. Luxembourg and Norway also have significant shares of adults in the upper reaches of the income distribution. Luxembourg, in fact, has a greater share of adults than the U.S. at many points of the income distribution to the right of $50,000.