European Integration and Income Inequality Convergence

Daniel Auguste, University of North Carolina at Chapel Hill

Scholars and policy makers have argued that European integration increases income inequality, while increasing states’ social policy convergence. However, scholars have paid little attention to the relationship between European integration and income inequality convergence. This paper fills this gap in the literature by investigating the relationship between European integration and income inequality convergence from 1980-2007 using a sample of 17 European Union countries. Preliminary findings show a sigma convergence, which is a decrease in the dispersion of income inequality across the 17 E.U. countries over 1980-2007. The results also show a beta-convergence; that is, some countries with below average income inequality have caught up with those with above average income inequality as a result of European economic and political integration.