Income distribution in new (and old) EU member states

Abstract

The paper, based on recent EU-SILC data, investigates the patterns of income inequalities in “old” and “new” EU member states. We describe income inequality within countries as well as income differences between states and test our results using different methodological assumptions. Our results show that the group of new member states was no less heterogeneous in terms of inequality and poverty than the EU15 at the time of EU enlargement. The most important difference between the two country groups is found in their GDP levels and in some measures that are directly related to economic development. We observed that sensitivity to changes in the equivalence scales is not systematically related to membership status; thus for overall inequality comparisons of countries, a standard scale seems appropriate. The possibility of a difference between “old” and “new” EU member states in the role of incomes in generating overall welfare of households calls, however, for caution in interpretation.