Crisis and Inequality in the European Union

Abstract

The objective of this work is to analyse the factors that influence a greater or lesser inequality in income distribution in the 27 EU countries, paying particular attention to the effect that the economic crisis has had. For this purpose we have used panel data covering a period of 16 years (from 1996 to 2011, inclusive), and we have introduced additional variables over and above those normally used, such as the ideology of the governing party, the economic freedom index, as well as the ‘crisis’ variable. The results obtained enable us to conclude that while the economic crisis has not necessarily caused a worsening in inequality, the response of European governments by means of social policy has not so far proved effective in the fight against the lack of equality in income distribution.