The Impact of Economic Integration on Income Inequality in the EU: A Panel Data Analysis of the EU Members from 2002-2020

• 발행기관: 세종대학교 경제통합연구소
• 저자명: Quinten De Wettinck Aad van Mourik
• 간행물 정보: 『Journal of Economic Integration』제39권 제1호, 1~41쪽, 전체 41쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2024.03.01

국문 초록

Abstract This paper investigates the relation between economic integration and income inequality for the 27 current EU members from 2002 to 2020. The Gini coefficient is the dependent variable in a panel data regression analysis, and is expressed as a function of indicators related to economic integration (total trade, intra-EU trade, foreign direct investment (FDI) inflow and outflow) and a set of control variables. Although much research points to a significant relationship between inequality and integration, there is no consensus on the sign and magnitude of the effect. In this paper, four random effects panel models are estimated with robust standard errors to uncover this relationship. The results show that in the context of the EU, intra-EU trade is associated with decreased income inequality, while overall trade and FDI in- or outflow seem to have no direct effect on the income gap. In addition, the level of economic development seems to moderate the effect of intra-EU trade: for countries with a below-average gross domestic product (GDP) per capita, the reducing effect of integration on Gini is weaker than for richer countries. Additionally, market capitalisation, the presence of natural resources and government spending on social benefits are associated with reduced inequality, while unemployment and population size seem to drive income disparities. These results are consistent with a major part of the existing literature and lead to interesting conclusions for policy makers. The originality of this work differentiating it from prior research is twofold: (1) the region of examination is the EU, which is not often the subject of similar analyses, and (2) an interaction effect is examined that differs from the conventional measures for less developed economies.

목차

I. Introduction

II. Literature Review

III. Methodology

IV. General Discussion

V. Conclusion

키워드

random effects panel models economic integration income inequality European Union