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Differently unequal: Zooming-in on the distributional dimensions of the crisis in euro area countries

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  • D'Errico, Marco
  • Macchiarelli, Corrado
  • Serafini, Roberta

Abstract

This paper discusses how income inequality developed during the current crisis in euro area countries, as well as the role played by each income source. Based on an extended definition of income – including additional components which do not appear in the standard Eurostat definitions – we complement the information provided by the Gini index and quantile ratios by computing an alternative inequality indicator, developed by Zenga (2007), and its decomposition by income source. While broadly confirming the distributional effect of the crisis documented in previous studies, we find that in specific countries the level of inequality appears higher when alternative measures are taken into account, and that the rise of inequality since 2008 has not been as modest as the previous studies would suggest. The paper further looks at how the distribution of income has evolved during the crisis by income quantile groups (i.e. ‘zooming-in’). The results point to varying contribution of labour income in 2011 compared to 2007. In addition, while the impact of individual households' characteristics shows a non-linear pattern across income quantile groups before the crisis, such dispersion has decreased in 2011.

Suggested Citation

  • D'Errico, Marco & Macchiarelli, Corrado & Serafini, Roberta, 2015. "Differently unequal: Zooming-in on the distributional dimensions of the crisis in euro area countries," Economic Modelling, Elsevier, vol. 48(C), pages 93-115.
  • Handle: RePEc:eee:ecmode:v:48:y:2015:i:c:p:93-115
    DOI: 10.1016/j.econmod.2014.11.022
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    Cited by:

    1. Donatella, Baiardi & Claudio, Morana, 2015. "Financial deepening and income distribution inequality in the euro area," Working Papers 316, University of Milano-Bicocca, Department of Economics, revised 04 Dec 2015.
    2. Marco D'Errico & Stefano Battiston & Tuomas Peltonen & Martin Scheicher, 2016. "How does risk flow in the credit default swap market?," ESRB Working Paper Series 33, European Systemic Risk Board.
    3. repec:eee:finsta:v:35:y:2018:i:c:p:53-74 is not listed on IDEAS
    4. Castillo-Manzano, José I. & Pedregal, Diego J. & Pozo-Barajas, Rafael, 2016. "An econometric evaluation of the management of large-scale transport infrastructure in Spain during the great recession: Lessons for infrastructure bubbles," Economic Modelling, Elsevier, vol. 53(C), pages 302-313.
    5. repec:taf:applec:v:50:y:2018:i:51:p:5521-5542 is not listed on IDEAS
    6. repec:voj:journl:v:63:y:2016:i:2:p:231-258 is not listed on IDEAS
    7. repec:eee:jimfin:v:85:y:2018:i:c:p:187-214 is not listed on IDEAS
    8. repec:eee:ecmode:v:70:y:2018:i:c:p:40-55 is not listed on IDEAS

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