Households in the economy
Households form one of the sectors of the economy. Other sectors include the public sector, businesses and the financial and insurance sector. These all interact with each other. There are 2.8 million households in Finland. The decisions of households are therefore critical for the entire economy.
The Finnish economy has many entities that pay taxes to the central government, which also receives taxes through the taxation of goods and services. The use of the money is decided by Parliament and the Government. Taxes play a key role in securing the wellbeing of citizens, because local government pays for schools, homes for the elderly, health centres and libraries, for example, with the central government transfers it receives for them. Citizens pay taxes not only to the central government but also directly to local government.
We citizens play a key role in the national economy. We receive wages or income transfers with which we can buy goods and services from businesses. Our money is also in bank accounts as savings and investments. We can borrow more money from banks. We pay taxes to central and local government, from which we receive services and income transfers, such as financial aid for students or child benefit.
