From a long-term perspective, the income of Dutch households would be expected to grow at about the same speed as the country’s output. When Dutch GDP increases, there is more income to distribute among all those who contributed to its being earned, including households. However, in the past two decades growth of disposable household income, adjusted for inflation, lagged far behind GDP growth (see Figure 1). In 2012, the per capita real disposable income of households only marginally exceeded the level seen in 1997. When looked at this way, the population’s spending power has hardly improved in fifteen years’ time. In the wake of the credit crisis, per capita GDP also dropped sharply. In real terms, per capita output last year virtually equalled that recorded in 2006.
In other words, an increasing proportion of all the money earned in the Netherlands no longer ends up in the country’s household purses. Whereas in 1992 disposable household income still accounted for more than 54% of GDP, that share had dropped to a little under 45% by last year. If this percentage had not decreased since 1992, disposable household income would have been EUR 60 billion higher in 2012. The question then is where that income went.