Inequality and Unemployment Patterns in Europe: Does Integration Lead to (Real) Convergence?

Mercedes Monfort, Javier Ordóñez and Hector Sala
Additional contact information
Mercedes Monfort: Instituto de Economía Internacional

Open Economies Review, 2018, vol. 29, issue 4, No 2, 703-724

Abstract: Abstract The economic convergence criteria adopted in the Maastricht Treaty and the fiscal discipline of the Stability and Growth Pact enforced nominal convergence, leaving aside real convergence indicators. In this paper, we use cluster analysis to examine the convergence patterns of income inequality, absolute redistribution (a measure of governments’ effectiveness in correcting for inequality) and unemployment. The expected outcome after years of economic integration was, ex-ante, convergence to a single cluster. Our results, however, uncover a variety of groups, implying that economic integration has not led to real economic convergence. Moreover, the existence of different patterns suggests: (i) that traditional classifications (Anglo-Saxon, Continental European, European Periphery, and Nordic models) remain broadly valid; (ii) that there is no unemployment-inequality trade-off to be exploited in terms of economic policy; and (iii) that the redistributive capacity of governments plays a pivotal role in coping with inequality without negative effects in terms of unemployment.

Keywords: Europe; Convergence; Clusters; Unemployment; Inequality; Redistribution (search for similar items in EconPapers)
JEL-codes: C33 D63 F15 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://link.springer.com/10.1007/s11079-018-9488-x Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Inequality and unemployment patterns in Europe: Does integration lead to (real) convergence? (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:openec:v:29:y:2018:i:4:d:10.1007_s11079-018-9488-x

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11079/PS2

DOI: 10.1007/s11079-018-9488-x

Access Statistics for this article

Open Economies Review is currently edited by G.S. Tavlas

More articles in Open Economies Review from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().