Disposable income in the Netherlands doubled in the past 50 years

The average net disposable income for Dutch households rose by 112 percent in 2020 compared to 1969, Statistics Netherlands stated. That means that last year the net disposable income per person lay at 21.9 thousand euros.

The GDP rose by 126 percent during the same time period. The faster growth of the GDP compared to the net disposable income is due to a stagnation of the net disposable income per household between 2001 and 2008. The stagnation in income was largely due to higher taxes and premiums. As a result, the GDP increased but the share per household decreased.

Normally, the GDP and the disposable income increase equally. 2020 was an exception to this rule. Last year, the GDP shrank by 3.7 percent and income increased by 2.4 percent.

The net disposable income per household is the amount each household has to pay for housing, groceries and leisure activities. This amount can include wages, income accumulated through self-employment and social benefits. Individuals can spend this income as they wish.

Alternative disposable income includes government consumption, such as healthcare, education and social benefits. Individuals are not free to dispose of this income as they please and have to use it only for its intended purpose.

If increased healthcare expenditure is included, the GDP and the alternative disposable income per household grew at the same rate between 2001 and 2008. During that period, the Dutch used healthcare services more often which means the higher alternative disposable income compensated for the lower freely disposable income.