Regional Income Inequality and Convergence Processes in the EU-25
AbstractThe paper investigates income inequality and convergence among the EU-25 countries and their regions at NUTS 3 (Nomenclature of Territorial Units for Statistics) level during the period 1995-2002. We measure the level of income inequality and its decomposition distinguishing the between and within country inequality as the components of the overall income inequality of EU-25, EU-15 and the new member states (NMS) of the EU recent enlargement in May 2004. In order to assess the inequality in living standards GDP in purchasing power standards (PPS) is used. In the empirical analysis of the convergence processes we consider the effects of interactions among neighbouring regions implementing spatial econometrics techniques. The estimation results are sensitive to the control for national effects. While the EU-25 and the EU-15 experienced a slow but significant process of absolute convergence there is no evidence found for regional convergence when national effects are considered. In the NMS the process of conditional convergence across regions even turns out to be significantly negative. This indicates that there were some divergence tendencies in the NMS during the period of 1995 â€“ 2002.
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Bibliographic InfoPaper provided by European Regional Science Association in its series ERSA conference papers with number ersa06p229.
Date of creation: Aug 2006
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Other versions of this item:
- Paas, Tiiu & Schlitte, Friso, 2007. "Regional income inequality and convergence processes in the EU-25," HWWI Research Papers 1-11, Hamburg Institute of International Economics (HWWI).
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-14 (All new papers)
- NEP-EEC-2007-01-14 (European Economics)
- NEP-GEO-2007-01-14 (Economic Geography)
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