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Mapping Regional Personal Income Distribution in Western Europe: Income per Capita and Inequality

  • Rodríguez-Pose, Andrés
  • Tselios, Vassilis

Past studies of regional economic disparities in the EU are entirely based on the information provided by macroeconomic variables. This paper considers the microeconomic perspectives of a region, paying attention not only to average but also to inequality levels of individual incomes within regions. It maps regional personal income distribution in western Europe, using data from the European Community Household Panel (ECHP) data survey covering more than 100,000 individuals, for 102 regions, and over the period 1995-2000. The Exploratory Spatial Data Analysis on income per capita and inequality revealed a rich set of findings. (1) There is a strong negative relationship between income per capita and inequality which is highly robust across inequality measurements. (2) 80 percent of the income inequality in Europe takes place among individuals living in the same region. (3) Regions with similar income conditions tend to cluster, not only within national borders but also across nations. (4) There is a North-South and an urban-rural divide where Northern regions and city-regions have the highest economic development as well as the lowest levels of inequality.

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Paper provided by Economic and Social Research Institute (ESRI) in its series Papers with number DYNREG33.

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Length: 40 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:esr:wpaper:dynreg33
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  1. Andrés Rodríguez-Pose & Vassilis Tselios, 2008. "Education and Income Inequality in the Regions of the European Union," SERC Discussion Papers 0011, Spatial Economics Research Centre, LSE.
  2. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January.
  3. Patricia Justino & Julie Litchfield & Yoko Niimi, 2004. "Multidimensional Inequality: An Empirial Application to Brazil," PRUS Working Papers 24, Poverty Research Unit at Sussex, University of Sussex.
  4. Martin, Philippe, 1999. "Public policies, regional inequalities and growth," Journal of Public Economics, Elsevier, vol. 73(1), pages 85-105, July.
  5. Rodriguez-Pose, Andres, 1998. "Dynamics of Regional Growth in Europe: Social and Political Factors," OUP Catalogue, Oxford University Press, number 9780198233831, March.
  6. Juan R. Cuadrado-Roura, 2001. "Regional convergence in the European Union: From hypothesis to the actual trends," The Annals of Regional Science, Springer, vol. 35(3), pages 333-356.
  7. Quah, Danny T., 1996. "Empirics for economic growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1353-1375, June.
  8. Sen, Amartya, 1997. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198292975, March.
  9. Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September.
  10. Roberto Ezcurra & Pedro Pascual & Manuel Rapun, 2006. "Regional mobility in the European Union," Applied Economics, Taylor & Francis Journals, vol. 38(19), pages 2237-2253.
  11. Azariadis, Costas & Drazen, Allan, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 501-26, May.
  12. Roberto Ezcurra & Pedro Pascual, 2005. "Is there convergence in income inequality levels among the European regions?," Applied Economics Letters, Taylor & Francis Journals, vol. 12(12), pages 763-767.
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