Finland

Title: Income Distribution Survey 2000

GENERAL INFORMATION AND BASIC DEFINITIONS

1. Background

Further information is available from Statistics Finland of Statistics Finland, FIN-00022 Statistics Finland, phone: 358 9 1734 3680, fax: 358 9 1734 3264, e-mail: veti-matti.tormalehto@stat.fi.
Data have been collected by household survey since 1977. ¹

2. Purpose and coverage

The following purposes are considered to be very important or of some importance:²

• to study the general structure of household incomes/expenditures
• to study income/expenditure patterns of disadvantaged groups, including pensioner households, single parent households, etc
• to study income/expenditure disparities among socio-economic groups
• to study consumer behaviour among socio-economic groups
• for general poverty and/or income distribution studies
• to study effects on income and expenditure of policy changes, especially tax changes

Lesser importance is attached to:²

• for market research purposes

Geographic coverage: National without any specific geographic areas excluded.

Population coverage:
The following types of household are included in the data collection:

• one person private households
• private households with more than one person
• households of other foreigners in the country
• armed forces residing in private housing within military base
• armed forces residing in private housing outside military base

The following types of household are excluded in the data collection:

• those in collective housing (such as long term hospitals, prisons, monasteries, military quarters)
• non-resident households of nationals (households of nationals located abroad)
• diplomatic households in the country

Units:
Dwelling units are used in the sample selection and are characterised by:

• single structure - detached housing unit
• single unit in a structure containing more than one housing unit
• multiple structures within a compound (e.g. huts)
• street address

Data are recorded for the household unit which is characterised by:

• one person units
• two or more people living together:
  • pooling their income to some extent

Unit members: ³ Usual residents temporarily living away from the dwelling are included, if away continuously for less than months. Visitors (not usual residents) temporarily living in the dwelling are not included as unit members. Domestic staff living in same dwelling/compound are not included in the unit.

Head of unit: ⁴
The concept of head of household/other unit is used in this survey and is characterised by:

• main income earner

3. Reference periods

The time period to which income and/or expenditure statistics refer when released/published is from 01/00 to 12/00. These data are collected in the period from 01/01 to 02/02.⁵ This survey is conducted annually. The statistics are published annually.

SURVEY METHODOLOGY

4. Sample design

The Primary, Secondary and Ultimate Sampling Units are none, none and household respectively.

Stratification:
Households/Consumption Unit, Income Unit, Family Unit were stratified using the following criteria:

• income class
• social class of sampled person

The sampling frames for the Primary Sampling Unit (PSU) and Ultimate Sampling Unit (USU) were a set of administrative registers (or combination of such registers) and none respectively. Primary Sampling Units (PSU) were selected using probability proportional to size. The sample size was 10423 households or other units and 10423 interviews. The overall response rate for the survey was 17 percent. Errors/biases were minimized by using an updated sampling frame, an increased sample size.

Enumeration procedure: Enumeration uses a panel design in which each reporting unit is enumerated more than once. The sample is not divided into representative sub-samples. The panel has an expected lifetime of 2 years, and each reporting household/unit is enumerated 2 times in total. If a reporting household/unit drops out from the panel, it is abandonned. If changes occur in composition of the reporting household/unit during the lifetime of the panel, then it continues in the panel. No action is taken to select a smaller set of reporting units for more detailed questioning.

Two-year rotating panel. Each household is in the sample for two consecutive years. Every year half of the total sample changes, i.e. old panel is dropped and a new two-year panel begins..

DATA COLLECTION, CONCEPTS, DEFINITIONS AND CLASSIFICATIONS

5. Income data

Income data are collected. Receipts do not have to be regular and recurring to be considered as income. Income includes receipts resulting from the sale or reduction of assets and/or from incurring liabilities are included in income. Income excludes receipts that are not currently available to the unit.

The following receipts are collected separately:

• wages and salaries
• cash bonuses and gratuities
• commissions and tips
• employee income in-kind provided free or subsidized: housing
• employee income in-kind provided free or subsidized: car/transportation
• profit/loss from unincorporated enterprises (mixed income)
• services from owner-occupied dwellings
• interest received
• dividends
• royalties
• regular pensions/annuities from schemes to which employee does not contribute
• retirement pensions from compulsory social security schemes
• old age benefits⁹
• other pensions¹⁰
• unemployment benefits¹¹
• family-related allowances
• sickness benefits
• invalidity benefits
• education-related allowances
• housing allowances
• survivors benefits¹²
• medical reimbursements , excluded for other reasons
• other social insurance benefits
• other social assistance benefits
• regular support received from non-profit institutions serving households: cash, e.g. scholarships
• regular inter-household transfers received from: family, e.g. alimony, child/parental support
• regular inter-household transfers received from: free dwelling
• regular inter-household transfers received from: subsidized dwelling

The following receipts are collected but not separately:

• remuneration for time not worked, e.g. leave pay
• termination and redundancy payments⁸
• employee income in-kind provided free or subsidized: meals
• employee income in-kind provided free or subsidized: goods or services produced by employer
• employee income in-kind provided free or subsidized: other goods or services
• drawing for own use from unincorporated enterprises
• rentals (payment received for produced assets e.g. house) , net of expenses
• rents (payment received for un-produced assets e.g. land)
• regular inter-household transfers received from: regular inheritances or trusts
• regular inter-household transfers received from: regular cash gifts
• regular inter-household transfers received from: regular in-kind gifts

The following receipts are not collected:

• employer social security contributions
• employee social security contributions
• goods produced for own consumption
• services produced for own consumption
• goods produced for barter
• services produced for barter
• stock consumed from unincorporated enterprise
• services from other consumer durables (net)
• free government dwelling
• subsidized government dwelling
• food subsidies
• regular support received from non-profit institutions serving households: goods and services
• regular support received from non-profit institutions serving households: free dwelling
• regular support received from non-profit institutions serving households: subsidized dwelling
• regular inter-household transfers received from: regular free services
• social transfers in kind: medical services
• social transfers in kind: public education
• social transfers in kind: transport subsidies
• social transfers in kind: cultural and recreational services
• social transfers in kind: others

The following receipts are classified as income from paid employment:

• wages and salaries
• cash bonuses and gratuities
• commissions and tips
• remuneration for time not worked, e.g. leave pay
• termination and redundancy payments⁸
• employee income in-kind provided free or subsidized: housing
• employee income in-kind provided free or subsidized: meals
• employee income in-kind provided free or subsidized: car/transportation
• employee income in-kind provided free or subsidized: goods or services produced by employer
• employee income in-kind provided free or subsidized: other goods or services

The following receipts are classified as income from self-employment:

• profit/loss from unincorporated enterprises (mixed income)
• drawing for own use from unincorporated enterprises
• royalties

The following receipts are classified as property income:

• services from owner-occupied dwellings
• rentals (payment received for produced assets e.g. house) , net of expenses
• rents (payment received for un-produced assets e.g. land)
• regular pensions/annuities from schemes to which employee does not contribute

The following receipts are classified as employment-related transfer income:

• retirement pensions from compulsory social security schemes
• old age benefits⁹
• other pensions¹⁰
• unemployment benefits¹¹
• sickness benefits
• survivors benefits¹²

The following receipts are classified as transfer income but not employment-related:

• family-related allowances
• invalidity benefits
• education-related allowances
• housing allowances
• other social insurance benefits
• other social assistance benefits
• regular support received from non-profit institutions serving households: cash, e.g. scholarships
• regular inter-household transfers received from: family, e.g. alimony, child/parental support
• regular inter-household transfers received from: regular inheritances or trusts
• regular inter-household transfers received from: regular cash gifts
• regular inter-household transfers received from: regular in-kind gifts
• regular inter-household transfers received from: free dwelling
• regular inter-household transfers received from: subsidized dwelling

The following receipts are excluded for other reasons:

• medical reimbursements

The reference period for:

• wages and salaries was calendar year
• cash bonuses and gratuities was calendar year
• commissions and tips was calendar year
• remuneration for time not worked, e.g. leave pay
• termination and redundancy payments⁸ was calendar year
• employee income in-kind provided free or subsidized: housing was calendar year
• employee income in-kind provided free or subsidized: meals was calendar year
• employee income in-kind provided free or subsidized: car/transportation was calendar year
• employee income in-kind provided free or subsidized: goods or services produced by employer was calendar year
• employee income in-kind provided free or subsidized: other goods or services was calendar year
• profit/loss from unincorporated enterprises (mixed income)
• drawing for own use from unincorporated enterprises
• services from owner-occupied dwellings

Negative values (business losses) were excluded when computing self-employment income.

6. Expenditure data

Data collection method:

Diaries are not used to collect expenditure data.

Interviews are used to collect expenditure data with the respondent completing the interview by a mix of recall and using documentation.

Data for the following expenditure items are collected by referring:⁷

• to expenditures in last 12 months:
  • housing

Data for the following expenditure items are not collected:

• food
• other household non-durable goods
• clothing, footwear
• other personal non-durable goods
• other durable goods
• households services
• personal services

7. Other Data Collection Issues

The following other topics are covered:

• demographic characteristics
• education attainment of members
• employment status of members
• occupation of members
• housing characteristics
• indebtedness

Non-response: There is no substitution for non-response, whether by non-contact or by refusal.

Reporting errors are reduced using the following measures:

• careful instrument design
• quality control

DATA PROCESSING, ANALYSIS AND DISSEMINATION

Answers are pre-coded on data collection forms to the extent possible.

Extreme values are amended. In-kind receipts are included in the estimates, but consumption of own production is not. In-kind receipts are valued using: registers Consumption of own production is not valued.

Treatment of owner-occupied housing: Values of owner-occupied housing are included in the total income/expenditure estimates and are valued using the rental equivalent net of housing costs usually paid by owners.

The following information is used in this valuation:

• respondent provides an estimate
• imputed based on housing and rent data

Treatment of selected groups/values in analysis: Some households/units are excluded from analysis because of incomplete response. Missing values are imputed always . Supplementary sources are used to adjust estimates for under- or over-reporting. No groups are excluded from data analysis.

Weighting:
Weighting factors are used to adjust for:¹³

• sampling
• non-response
• bench-marking

Sampling errors: Sampling errors are computed for major aggregates and these sampling errors are published.

Tabulation and Analysis: Statistics are presented showing averages per year and statistics are analysed and tabulated for households and for individuals separately.

The following classifications are used for tabulation and analysis of income statistics:¹⁴

• age of reference person or head of household
• other characteristic of reference person or head of household
• income percentiles, deciles
• absolute income groups
• household size
• structure of household
• other characteristic of household

Documentation and Dissemination:
Published survey reports: Income Distribution Statistics 2000. Report is pubblished in Finnish but contains an English summary

Additional statistics (or special tables on request) are available for public use, with charges. Separate tables are published for low income households. Files of unidentifiable unit data are available (or available on request) for public use, with charges.