CDP analysed the growth of average income of the residents of large cities, small towns and rural areas in EU during 2013-2022. The analysis was carried out on the database of Eurostat, the statistical office of the European Union.
At the end of 2022, the level of mean (average) rage income in large cities among the 27 EU countries is maximum in Luxembourg (58,329 euros), Denmark (38,697 euros) and Ireland (36,811 euros). These values significantly exceed the average European level of income in large cities (it amounted to 23,013 euros).
In our opinion, it is important to assess the level of income not only by actual values, but also by the dynamics of this indicator. Since stable income growth provides a significant contribution to the economic growth of cities and improves the level and quality of life of residents.
We calculated how the average income of the population in large cities of the EU countries grew over the decade 2013 - 2022 – nominal growth (in Euro) and separately percentage growth. And the Top-10 lists in nominal growth and percentage growth differ quite a lot.
If we look at the TOP 10 countries in terms of growth in nominal income (Euro, 2013-2022), we can note that the leaders have changed and Austria, Finland, Sweden, France were not included in the list of leaders. Growth in large cities of Austria turned out to be only slightly better than the average European (+4,941 euros vs +4,550 average European), while Finland, Sweden, France turned out to be lower than the European average (+3,880 euros, +2,159 euros and +1,720 euro respectively).
At the same time, the list contains such countries as Estonia (+9,204 euros), Lithuania (+8,356 euros), Latvia (+6,642), Malta (+5,961 euros).
If we look at the increase in average income as a percentage (2013-2022), then a positive trend becomes visible in countries with an average income not exceeding the average European level. Romania (+176%), Lithuania (127%), Estonia (105%) and Latvia (104%) became the absolute leaders in terms of percentage income growth relative to their 2013-level. At the same time, as we wrote above, Lithuania, Latvia and Estonia managed to enter the European Top in terms of income growth of the residents of large cities. in the nominal value.
Also, in the TOP 10 countries in terms of the increase in the average income of the urban population as a percentage includes such countries as Bulgaria + 91%, Poland + 60%, Czechia + 56%, Croatia + 56%, Malta + 44% and Hungary + 41%.
In our opinion, the fact that countries with city residents’ average income below the EU average are among the leaders in terms of growth, indicates a positive trend. This means that competition between European cities for the most talented and efficient population is yet to come. Cities should continue to pursuit to increase high-paying and interesting jobs in their territory, to create conditions for business and new investments.
The population of large cities of Estonia, Lithuania, Latvia, Malta grew most dynamically both in nominal value and in percentage terms. This indicates significant and sustainable economic growth and the prospect of major cities of these countries entering the EU TOP-10 in terms of urban income in the medium term (by 2030), if this trend continues.
Also, as part of the study of the dynamics of the average income of the residents of large cities, small towns, and rural areas, we discovered the second interesting trend.
In most countries, of course, due to the structure of the economy and the structure of employment, the average income level in large cities is much higher than in small towns or rural areas.
At the same time, in four countries, we see the opposite: in the Netherlands, Austria, Belgium and Malta the average income in small towns and rural areas exceeded the income of residents of large cities.
Interestingly, over the period 2013-2022 in 12 countries the gap between the median income of residents of large cities and the population of small towns and rural areas has narrowed.
Our analysis shows that trends in country income levels at the level of large cities, small towns and rural areas diverse. Most likely, we see effects of remote employment trends, an increase in the share of other forms of income, and the migration of the wealthy population to more environmentally friendly areas.
The constant improvement of transport infrastructure, the desire to live more environmentally friendly places help people make flexible decisions.
Will this trend continue in the future? Most likely, climate change can strengthen this trend already in the next decade.
Source: Eurostat, the statistical office of the European Union