Militarization and Income Inequality in European Countries (2000–2017)

Abstract

Abstract This paper investigates the impact of militarization on income inequality. The analysis is conducted on a panel of 40 European countries over the period 2000–2017. The degree of militarization of a country is captured by means of the Global Militarization Index (GMI) and we employ the Gini index as a measure of inequality. The main findings show that militarization and inequality are positively associated. The findings appear to be robust. We also consider control variables related to military commitment, namely (i) conscription; (ii) NATO membership; (iii) involvement in an armed conflict. Interestingly conscription appears to be negatively associated with income inequality whereas an armed conflict and NATO membership show the opposite sign. For sake of robustness, we undertake the same estimations on alternative samples of countries and results are confirmed. Eventually, to deal with the issue of endogeneity, we apply the Lewbel, IV–GMM approach and results are confirmed.