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Income Inequalities in EU Countries: Gini Indicator Analysis

Kolluru Mythili () and Semenenko Tetiana ()
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Kolluru Mythili: Professional Studies and Undergraduate Dept., College of Banking and Financial Studies; Muscat, Oman
Semenenko Tetiana: Sumy State University, Ukraine

Economics, 2021, vol. 9, issue 1, 125-142

Abstract: Franklin Delano Roosevelt said that “the test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.” According to the World Economic Forum (2021), income disparity is at the top of global risks in the coming years. The development of income inequality is a growing concern worldwide, particularly since the Great Recession. This study is based on available data on the Gini coefficient of equivalized disposable income from 2005 to 2019 for the 27 European Union countries. We found that the indicator’s value demonstrates a reasonably even distribution of income (not exceeding 40%) in all European Union countries, except Bulgaria. We used the FORECAST ETS function (Excel for Microsoft 365) that is based on the AAA version of the Exponential Smoothing (ETS) algorithm to conduct our analysis. We grouped the EU 27 countries to investigate income equality behavior. According to the interval’s median of the sample’s standard deviation, we selected Italy, Spain, Germany, Slovakia, Hungary, Bulgaria for further investigation. We conclude the absence of general trends in the inequality of income distribution in society due to the financial crisis factors. The research presents exploratory insights into income inequality in the European Union.

Keywords: EU; Income inequality; Gini; Sturges formula; quintile; forecast; Exponential Smoothing; Global financial crisis; Standard deviation (search for similar items in EconPapers)
JEL-codes: D33 E17 E21 E24 E25 Y1 Y10 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.2478/eoik-2021-0007

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