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European Integration and Inequality among Countries: A Lifecycle Income Analysis

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  • José M. Pastor
  • Lorenzo Serrano

Abstract

We analyze the effects of the expansions of the European Union on inequality over the period 1960-2005 using an approach based on individuals' lifecycle incomes. This allows us to estimate permanent incomes and consider the effect of both survival rates and different rates of economic growth. According to our estimates, inequality in terms of permanent income was substantially less than that actually observed in current per capita income at the time of almost all the expansions (1973, 1981, 1986, 1995) except those of the last ten years (from 2004 onwards). The results point to the key role of policies that stimulate growth in the less developed countries. In fact, according to our estimates, with an annual beta-convergence of 2% in current income, inequality in permanent income would be one third lower.
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  • José M. Pastor & Lorenzo Serrano, 2012. "European Integration and Inequality among Countries: A Lifecycle Income Analysis," Review of International Economics, Wiley Blackwell, vol. 20(1), pages 186-199, February.
    • Handle: RePEc:bla:reviec:v:20:y:2012:i:1:p:186-199
    DOI: j.1467-9396.2011.00998.x
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    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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