Economy of Finland - Household Income and Consumption

Household Income and Consumption

Finland's income is generated by the approximately 1.8 million private sector workers, who make an average 25.1 euro per hour (before the median 60% tax wedge) in 2007. In 2003 residents worked on average around 10 years for the same employer and around 5 jobs in lifetime. 62 percent worked for small and medium-size enterprises. Female employment rate was high and gender segregation on career choices was higher than in the US. In 1999 part-time work rate was one of the smallest in OECD.

Future liabilities are dominated by the pension deficit. Unlike in Sweden, where pension savers can manage their investments, in Finland employer chooses a pension fund for the employee. The pension funding rate is higher than in most Western European countries, but still only a portion of it is funded and pensions exclude health insurances and other unaccounted promises. Directly held public debt has been reduced to around 32 percent in 2007. In 2007, the average household savings rate was -3.8 and household debt 101 percent of annual disposable income, a typical level in Europe.

In 2008, the OECD reported that "the gap between rich and poor has widened more in Finland than in any other wealthy industrialised country over the past decade" and that "Finland is also one of the few countries where inequality of incomes has grown between the rich and the middle-class, and not only between rich and poor."

In 2006, there were 2,381,500 households of average size 2.1 people. Forty percent of households consisted of single person, 32 percent two and 28 percent three or more. There were 1.2 million residential buildings in Finland and the average residential space was 38 square metres per person. The average residential property (without land) cost 1,187 euro per square metre (without land) and residential land on 8.6 euro per square metre. Consumer energy prices were 8-12 euro cent per kilowatt hour. 74 percent of households had a car. There were 2.5 million cars and 0.4 other vehicles. Around 92 percent has mobile phone and 58 percent Internet connection at home. The average total household consumption was 20,000 euro, out of which housing at around 5500 euro, transport at around 3000 euro, food and beverages excluding alcoholic at around 2500 euro, recreation and culture at around 2000 euro. Upper-level white-collar households (409,653) consumed an average 27,456 euro, lower-level white-collar households (394,313) 20,935 euro, and blue-collar households (471,370) 19,415 euro.