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THE EVOLUTION OF INCOME INEQUALITY IN THE EUROPEAN UNION

Juan Prieto-Rodriguez (), Rafael Salas () and Santiago Álvarez-García
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Santiago Álvarez-García: Instituto de Estudios Fiscales y Universidad de Oviedo

Working Papers from Instituto de Estudios Fiscales

Abstract: . The objective of this work is to analyse the income inequality in the 15 EU countries during the convergence process to the Monetary Union. Using the information contained in the European Community Household Panel, corresponding to the four first waves. Using the inverse second order stochastic dominance concept, we have carried out an ordering of these countries. Furthermore, this ranking allows us to determine if the differences among EU country members have increased or decreased during this particular period, that is, if there was a real convergence in income equality. In addition, we have also studied whether the inequality of income has diminished within and between countries over time. Gini's generalised family indices proposed by Donaldson and Weymark (1980 and 1983) and Yitzhaki (1983) have been used. This allows us to test the sensitivity of the results obtained to different degrees of inequality aversion and to different equivalence scales, taking into account household sizes.

Keywords: Inequality; European Union; income distribution; stochastic dominance. (search for similar items in EconPapers)
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Working Paper: The evolution of income inequality in the European Union (2003) Downloads
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