Poverty and Income Inequality in Scotland 2012/13

Chapter 3: Household characteristics and income distribution

3.1 Household composition

Key points:

• Single adult households are overrepresented in the bottom income deciles, particularly single parents and single working age adult households.
• 54 per cent of people in the bottom three income deciles are in households where noone is in employment, compared to 13 per cent in the top three deciles.
• 59 per cent of those in the bottom decile are in households with no adults in employment, a decrease of 6 percentages points on the previous year.
• However, families with someone in employment make up 46 per cent of those in the bottom three deciles, similar to 2011/12 (47 per cent).

Commentary:

There were a higher percentage of single adult households (both with and without children) towards the lower end of the income distribution. Single people without dependent children make up over 30 per cent of those in the lowest decile, and around 20 per cent in the other deciles, apart from the top decile where they represent only 10 per cent. Similarly, single parent households are concentrated in the lower income deciles, with more than half in the bottom three income deciles.

There were also more pensioners towards the lower end of the income distribution - the second, third and fourth income deciles contain the highest proportions.

Couple households without children were more likely to be the top end of the income distribution, while those with children are evenly spread across all deciles. Couple households may be more able to increase household income than single person households. Households without children may be more able to work more hours and have greater flexibility in the labour market.

3.2 Household economic status

Chart 13 below shows the employment characteristics of households in each decile. Each bar represents the percentage of people in that decile living in each of the households types: at least one adult in full time employment, part time employment only, no adults in employment (whether due to unemployment, not actively seeking employment, or retirement).

Chart 13 - Economic status of household, composition of each decile

Source: HBAI dataset, DWP.

Commentary:

Households where no-one is working either through unemployment, retirement or economic inactivity (those who are neither in work, nor looking for work) were more common towards the bottom of the income distribution. Over half (54 per cent) of people in the bottom three income deciles were in households where no-one is in employment, compared to 13 per cent in the top three deciles.

59 per cent of those in the bottom decile were in households with no adults in employment, a decrease of 6 percentage points on the previous year. This is the largest percentage point change of any decile. However, the percentage of households in the bottom 3 deciles combined with no adults in employment is largely unchanged due to decreases in the percentage of households in work in deciles two and three.

People in households where at least one adult is working full time (including those who are self-employed) made up 82 per cent of those in the top three deciles. However, households where at least one adult is working full time still made up 31 per cent of those in the bottom three deciles.

Households where adults are in part time employment only are spread across the income distribution, although they were more likely to be in the bottom four income deciles.