The labour market, income per capita and welfare in Europe: An overview of the last two decades

Raquel Sebastian ()

EKONOMIAZ. Revista vasca de Economía, 2022, vol. 101, issue 01, 158-183

Abstract: Using PWT10 and EU-SILC, we analyse the relationship between income per capita, wage inequality and welfare for 30 European countries over the period 2004-2019. We found that there is a great divergence between European countries in terms of labour productivity, although this variable is strongly (positively) related to the average salary of the different European economies. Spain has experienced one of the largest increases in wage inequality in the last two decades, and the functioning of the labour market is not the only factor that explains this evolution in the short term. The countries with the highest income per capita have increased their well-being the most, while in Spain this variable has barely changed. Gains in the mean wage have been offset by rising wage inequality. In addition to being far from the labour productivity figures of our more developed neighbours, we have a convergence problem in wage inequality.

Keywords: productivity; income per capita; wage inequality; welfare; Europe (search for similar items in EconPapers)
JEL-codes: D30 E23 E24 I31 J01 (search for similar items in EconPapers)
Date: 2022
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