Understating Gini Coefficient and Under-accounting of Income Inequality due to Exclusion of Asset and Investment Income

Parliamentary Question by Mr Fadli Fawzi:

To ask the Prime Minister and Minister for Finance whether it is the Ministry’s assessment that exclusion of income earned from assets and investments is likely to understate Singapore’s Gini coefficient and thus significantly under-account for income inequality in Singapore, based on its estimates of non-work income earned by higher-earning residents.

Parliamentary Reply by Second Minister for Finance, Ms Indranee Rajah:

In many jurisdictions, better-off households tend also to have more non-employment income, such as from assets and investments. However, such income tends to be under-reported.  

MOF and the Department of Statistics have been studying how to measure non-employment income better, and will share the findings when ready.