Income Inequality Convergence in European Union Countries – The Importance of Employment Structures

Abstract

Goal – the objective of the paper was to empirically identify the existence of income inequality convergence between EU countries over the period from 2009 to 2021 and the importance of structural change in this process (where structural change is understood as shifts in the sectional distribution of workers). Research methodology – for this objective, panel models of income inequality convergence considering the 27 EU Member States were estimated. Score/results – the obtained results provided a strong basis for confirming the existence of income inequality convergence between the European Union countries, which confirmed the growing similarity of these countries in this respect. The convergence also means that the level of inequality is rising across the EU. The carried out research did not allow the structural change to be explicitly recognised as a significant factor influencing changes in the level of income inequality, but it did reveal specific relationships in terms of the importance of institutional arrangements in this channel of influence. Originality/value – the research undertaken in this paper on the problem of inequality convergence in the context of serious economic perturbations allows to assess the sustainability of these processes and the strength of cohesion trends in the European Union. Identifying the convergence at the international level with increasing intra-country inequalities, they point to failures in the implementation of social cohesion policies.