The decomposition of income inequality in the EU-28

Kranzinger, Stefan (2020) The decomposition of income inequality in the EU-28. Empirica, 47. pp. 643-668. ISSN 0340-8744

Available under License Creative Commons: Attribution 4.0 International (CC BY 4.0).

Download (797kB)


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 ( 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: 07 Sep 2020 12:29
Related URLs:


View Item View Item


Downloads per month over past year

View more statistics