Income Inequality Convergence in the Development of European Countries

This paper examines how income inequality varied as new countries joined the European Union. We consider a convergence test of contributions to international income inequality of 32 European countries over the period 1989-2002. The results indicate a weak convergence of contributions to inequalities. The average speed of inequality convergence gets lower as the number of countries in the union increases. We also find that the effect of technological inequalities is significant and depends on the level of wealth of a country. Taking into account the heterogeneity of behavior through the convergence parameter suggests that the speed of inequality convergence varies across countries