European integration and the political economy of inequality

Abstract

This study examines the role of European integration as a potential source of income inequality in countries of the European Union. We distinguish between both economic and political integration and identify theoretical mechanisms that link the two to rising levels of inequality. The empirical analysis draws on time-series-cross-section data covering 14 European Union member states for the time period 1999–2010. In particular, we make use of a newly available dataset that measures individual degrees of integration across different dimensions. Our main finding is a positive association between political integration and inequality on the one hand as well as a nonassociation between economic integration and inequality on the other hand. This suggests that the recent trend toward inequality at the European Union national level is at least partly related to deepening political integration at the supranational level.