Is wealth inequality in the Netherlands increasing?

Published on: 31 October 2024

The wealthiest people in the Netherlands grew even richer last year, with their wealth increasing by an average of 5 percent, while the economy as a whole grew by a mere 0.2 percent, according to NOS.nl based on data from the Quote 500. Is this a sign that wealth inequality in the Netherlands is rising? We discuss this with Charles Kalshoven, expert strategist at APG.

In 2013, the Netherlands had 13 billionaires. This was during an economic crisis. Now, that number has risen to 52, as reported by the FD newspaper. Not only that, but the collective wealth of those listed in the Quote 500 has surged over the past decade from 84 billion to 253 billion euros. Additionally, the threshold to join this list keeps climbing, now requiring at least 130 million euros.

To get straight to the point: is wealth inequality really increasing?
“The short answer is ‘no.’ The most common measure of inequality is the so-called Gini coefficient, which is zero when everyone has the same wealth and one in the case of complete inequality. The Gini coefficient has actually been declining since 2013. But what explains this reduction in wealth inequality? One major factor is the significant rise in housing prices, which has built up more wealth for a broad middle group. Incidentally, accumulated pension wealth is not included in the Gini coefficient. If it were, the distribution of wealth would be much more even. For example, the wealthiest 10 percent in the Netherlands currently hold 62 percent of all wealth, but if pensions were included, this would drop to 48 percent. That said, don’t focus too much on the Quote 500 if you’re looking at wealth distribution. It represents a relatively small group of people, with limited impact on the bigger picture.”


The fact remains that the number of billionaires has grown, along with their wealth, which has outpaced both economic growth and inflation.

“That’s true, but these aren’t ideal comparisons. It’s more appropriate to compare this 5 percent wealth increase with the return on an investment portfolio. In that light, they’ve actually done poorly. Last year, the AEX gained 16 percent, and global stocks rose 18 percent in euros. A traditional 60/40 investment portfolio, with 60 percent in stocks and 40 percent in global bonds, also performed better, achieving a 12 percent return last year. Over a longer time horizon, wealth growth for the Quote 500 has also lagged behind stock market returns.


Since 2000, global stocks have outperformed with a 6 percent growth rate compared to 5 percent for the billionaires. If they had invested in a global index, collectively they would now be about 50 billion euros richer. Over the past few years, however, the wealthy have outpaced the stock market. Since 2014, their wealth has grown by an average of 13 percent, while a global equity portfolio rose by ‘only’ 10 percent per year during that time. But as I said, it’s a small group, so their wealth growth can still coincide with declining inequality.”

Young starters on the housing market may, in fact, experience growing inequality

The fact that wealth inequality has been decreasing for the past ten years doesn’t mean that an unequal distribution isn’t an issue. Is there a remedy for inequality?
“If economic inequality also leads to political inequality – for example, if money starts influencing politics – then you definitely have a problem. This year’s Nobel Prize in Economics winners, Acemoglu, Robinson, and Johnson, have written extensively on this topic. Social mobility – the chance to improve one’s economic standing – is an effective way to combat rising inequality in a society. A higher inheritance tax can be helpful here, for example. When a billionaire passes away, their children will inherit the wealth, even though they didn’t work for it. From an economic standpoint, it’s always a good idea to tax unearned income. Politically, however, it’s more complicated. Many see it as unfair, often arguing that taxes have already been paid on the wealth. But every euro in the economy has typically been taxed more than once. It’s also been earned multiple times and has bought multiple cartons of milk.”


One reason for declining wealth inequality in the Netherlands is the continuous rise in housing prices. At the same time, owning a home is becoming a less attainable dream for many young people.

“The increase in housing prices has indeed reshaped the wealth distribution. While homeowners benefit, young starters on the housing market are finding it harder to achieve their dream. They, in fact, may experience growing inequality. In the coming years, there will be an intergenerational transfer from parents with homes to their children. This could reduce disparities between generations, but within the younger generation, it can increase inequality. Not everyone has parents who own property. So, it’s possible that, on a macro level, inequality decreases, while certain groups in society feel left out. This highlights the difference between macro and micro perspectives. Under the macro surface, you see very different dynamics at play.”