From 1980 to 1990, Portugal experienced a generalized liberalization of economic activity due in large part to its 1986 integration in the European Union. This paper studies the changes in the Portuguese distribution of household income and expenditure during this period using microdata on household budgets and applying recent developments in statistical inference for Lorenz curves. The authors find a significant increase in six measures of welfare and an unambiguous decrease in the inequality of the respective distributions. Different explanations for the findings of decreased inequality are discussed. Copyright 1995 by The International Association for Research in Income and Wealth.
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