Calculation of Published Data for Singapore's Gini Coefficient Measuring Income Inequality

Mr Dennis Tan Lip Fong asked the Minister for Trade and Industry (a) whether published data for Singapore's Gini coefficient measuring income inequality includes both employer and employee CPF in the definition of income; and (b) if it does, what will be the latest Gini coefficient data if CPF income is excluded.

Mr Chan Chun Sing: The Gini coefficient published by the Department of Statistics (DOS) is computed based on household income from work. Both employer and employee CPF contributions are included in the definition of household income from work. This is because CPF contributions are a significant component of compensation from work, and can be used by households for housing, healthcare and investment purposes. Nonetheless, DOS also publishes a Gini coefficient that excludes employer CPF contributions from household income from work.

Both Gini coefficients are available on DOS’ website. In 2017, the Gini coefficient which includes employer CPF contributions was 0.459, while the Gini coefficient which excludes employer CPF contributions was 0.468. The former is lower because there is a cap on employer CPF contributions for employees who have reached the wage ceiling of $6,000.

DOS does not publish a Gini coefficient that excludes both employer and employee CPF contributions from household income from work.