Structural Conditions of Income Inequality Convergence Within the European Union

Magdalena Cyrek ()
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Magdalena Cyrek: Faculty of Economics and Finance, University of Rzeszów, Ćwiklińskiej 2, 35-601 Rzeszów, Poland

Sustainability, 2025, vol. 17, issue 14, 1-20

Abstract: European integration aims to achieve spatially sustainable development across the member states. However, the success of socio-economic integration is conditioned by structural features of the economies, which, hitherto, appear highly diversified across the EU countries. The paper focuses on the structural conditions of the process of income inequality convergence. It aims to identify differences in the convergence regarding the structural conditions of the economies. To fulfil the research tasks the paper classifies the 27 European member states according to their sectional employment structures using the Ward method. It then tests the appearance of beta convergence using FE panel models for the specified clusters of economies. It also considers structural change, measured by the NAV (norm of absolute value), as a determinant of income inequality convergence. The main research period covers 2009–2021. The findings of the paper confirm that income inequality convergence occurs within the groups of economies specified by different structural conditions. Importantly, the clustering according to the similarity of the employment structure overlaps with the division along the lines of the ‘new’ and ‘old’ member states, which proves the importance of historically shaped institutions for development. However, the observed convergence does not lead to improved social cohesion. Social policy, especially in the ‘new’ member states, is not able to offset the growth in market income inequality additionally stimulated by the structural changes. It can be concluded that an urgent need to design new solutions for social policy concerning structural transformation in employment in the EU emerges.

Keywords: income inequality convergence; sectional structure of employment; structural change (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:17:y:2025:i:14:p:6318-:d:1698391

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