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The decomposition of income inequality in the EU-28

Kranzinger, Stefan (2019) The decomposition of income inequality in the EU-28. Empirica. pp. 1-26. ISSN 0340-8744

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Abstract

This paper analyses the structure of the European income inequality by a decompo-sition in a within- and between-component. It illustrates a replication of the work of Beblo and Knaus (Rev Income Wealth 47(3):301-333, 2001) and decomposes the income inequality for the EU-28 in 2014 by using data from the European Survey on Income and Living Conditions. The Theil index is applied to additively decom-pose the sources of inequality into a within- and between-component by countries, country groups and demographic groups. This is done by using equivalised dispos-able household income and income before transfers and taxes. The results show that inequality, with regard to disposable income, is highest for households with house-hold heads older than 59 years and lowest for households with children. Moreover, high income countries have lower inequality, higher social expenditures and show a stronger relative reduction of income inequality after transfers and taxes than low income countries. On country group level, Social-Democratic countries have the lowest income inequality and redistribute most, while the opposite holds true for Baltic countries.

Item Type: Article
Additional Information: Open access funding provided by Vienna University of Economics and Business (WU). The online version of this article (https://doi.org/10.1007/s1066 3-019-09450 -9) contains supplementary material, which is available to authorized users.
Keywords: Theil index, Income Distribution, European Union
Classification Codes: JEL D31, D33
Divisions: Departments > Volkswirtschaft > Makroökonomie
Version of the Document: Published
Depositing User: Gertraud Novotny
Date Deposited: 27 May 2019 10:38
Last Modified: 27 May 2019 12:09
Related URLs:
FIDES Link: https://bach.wu.ac.at/d/research/results/91018/
URI: http://epub.wu.ac.at/id/eprint/6971

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