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European incomes, national advantages: EU-wide inequality and its decomposition by country and region

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  • Stefano Filauro

Abstract

This study analyses EU-28- and euro area-level income distribution with the latest EU-SILC data. More specifically it shows the evolution of inequality in net disposable and market incomes over the pre- and post-crisis period (2006-2013). I find that inequality between the EU-28 and euro area (EA) has converged due to a slow decrease in EU-28 inequality, at least until 2009, coupled with a mild increase in EA inequality. Thus, I compute how much between-country inequality, as opposed to within-country inequality, contributes to overall inequality in the EU-28 and euro area, observing that the trend of between-country inequality, albeit starting from very different levels, has been declining in the EU-28 while slightly increasing in the euro area. Similar trends are observed for between-region inequality. Finally, I approximate the extent to which individual incomes on the European scale can be predicted by country of residence and find evidence in line with the inequality decomposition by country.

Suggested Citation

  • Stefano Filauro, 2017. "European incomes, national advantages: EU-wide inequality and its decomposition by country and region," EERI Research Paper Series EERI RP 2017/05, Economics and Econometrics Research Institute (EERI), Brussels.
    • Handle: RePEc:eei:rpaper:eeri_rp_2017_05
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    Cited by:

    1. Ana Suárez Álvarez & Ana Jesús López Menéndez, 2021. "Dynamics of inequality and opportunities within European countries," Bulletin of Economic Research, Wiley Blackwell, vol. 73(4), pages 555-579, October.
    2. Gordon Anderson & Maria Grazia Pittau & Roberto Zelli & Jasmin Thomas, 2018. "Income Inequality, Cohesiveness and Commonality in the Euro Area: A Semi-Parametric Boundary-Free Analysis," Econometrics, MDPI, vol. 6(2), pages 1-20, March.
    3. Tsvetana Spasova, 2019. "Regional Income Distribution in the European Union: A Parametric Approach," Research on Economic Inequality, in: What Drives Inequality?, volume 27, pages 1-18, Emerald Group Publishing Limited.
    4. Peter Benczur & Zsombor Cseres-Gergely & Peter Harasztosi, 2017. "EU-wide income inequality in the era of the Great Recession," Budapest Working Papers on the Labour Market 1713, Institute of Economics, Centre for Economic and Regional Studies.

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    More about this item

    Keywords

    Distribution; income inequality; decomposition by country; European Union; equality of opportunity.;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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