Income Inequality Convergence Among EU Regions

Economic inequality has increased in many EU countries in the past few decades. Yet efforts to assess regional disparities across the EU mostly concentrate on convergence in average per capita incomes, offering little analysis of how regional income is distributed. Using new data from the Luxembourg Income Study (LIS) for 1989-2013, we test whether income inequality convergence has taken place among EU regions and assess which structural factors may affect the pace of this process. The analysis offers three findings. First, NUTS 2 regions are converging to a higher level of income inequality. Second, this process is significantly faster when regions share similar structural characteristics. Finally, there is evidence of a convergence -acceleration effect for regions receiving Cohesion Policy funds, suggesting therefore that these may be driving the convergence process.