Monthly Disposable Income and Standard of Living in Luxembourg

The ‘socioeconomic demography of the Luxembourg households‘ in terms of the ‘monthly disposable household income’ and ‘standard of living’ is presented here for the year 2019.

Monthly disposable household income = The income after deducting the direct taxes (personal income tax and municipal property tax, if applicable) from from the gross monthly income from all sources for a household.

Standard of Living = To normalize ‘monthly disposable household income’ across different household sizes (number of people in the household) and composition (age of the household members), the ‘standard of living’ is calculated. It is an ‘equivalance amount’ calculated by divding the ‘monthly disposable household income’ by the ‘household adult equivalents’. The primary adult member of the hosuehold has a value of 1 and for each additional member of age 14y or older, 0.5 adult equivalence is added and for any member of age below 14y, 0.3 adult equivalence is added.

Examples: (in all cases below, the monthly disposable household income of 5,000 Euro is considered and the ‘standard of living’ amount shows the equivalent disposable amount per member of the household in the end)
– 1 adult member: 5,000/1 = 5,000 Euro per month
– 2 adult members: 5,000/ (1+0.5) = 3,333 Euro equivalent per month
– 2 adults and a child of age 5y = 5,000/ (1+0.5+0.3) = 2,778 Euro equivalent per month
– 2 adults, a youngster of age 15y and a child of age 10y = 5,000/ (1+0.5+0.5+0.3) = 2,174 Euro equivalent per month

Observations: The monthly disposable income per household in Luxembourg in 2019 averaged at Euro 6,475, while the median was Euro 5,454, meaning half the households had less than Euro 5,454 per month while the other half had more than this amount. Although, this amount looked reasonably high, the average household size was 2.3 and in terms of ‘standard of living‘, nearly half (49.4%) of the households had less than Euro 3,000 equivalent! There were 255,700 households in Luxembourg in 2019.

data source: STATEC

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