DETERMINANTS OF INCOME INEQUALITY IN EU CANDIDATE COUNTRIES: A PANEL ANALYSIS
Journal
Economic Themes
Date Issued
2019
Author(s)
Abstract
Despite increasing income per capita, the EU candidate and
potential candidate countries remain confronted with high levels of income
inequality. The purpose of our paper is to identify the main determinants
of income inequality among the EU candidate countries. In addition to
macroeconomic factors, we also analyze the impact of demographic
variables to provide more reliable estimates. Using panel data analysis
with fixed effects in the period 2005-2017 for three EU candidate countries
(North Macedonia, Serbia and Turkey) we find that the unemployment
rate, the level of economic development and the investment rate are the
main determinants whose increase leads to a bigger income differentiation
in the analyzed countries. The government indebtedness has also a
statistically significant, but a negative impact on income inequality. The
other two macroeconomic variables in the model – the terms of trade and
inflation are statistically insignificant. Among the demographic factors,
population growth and education significantly affect income inequality
among the EU candidate countries. The obtained results suggest that a
sustainable economic growth combined with active measures in the labor
market and the improvement of education level of the population could
lead to more equal income distribution.
potential candidate countries remain confronted with high levels of income
inequality. The purpose of our paper is to identify the main determinants
of income inequality among the EU candidate countries. In addition to
macroeconomic factors, we also analyze the impact of demographic
variables to provide more reliable estimates. Using panel data analysis
with fixed effects in the period 2005-2017 for three EU candidate countries
(North Macedonia, Serbia and Turkey) we find that the unemployment
rate, the level of economic development and the investment rate are the
main determinants whose increase leads to a bigger income differentiation
in the analyzed countries. The government indebtedness has also a
statistically significant, but a negative impact on income inequality. The
other two macroeconomic variables in the model – the terms of trade and
inflation are statistically insignificant. Among the demographic factors,
population growth and education significantly affect income inequality
among the EU candidate countries. The obtained results suggest that a
sustainable economic growth combined with active measures in the labor
market and the improvement of education level of the population could
lead to more equal income distribution.
Subjects
File(s)![Thumbnail Image]()
Loading...
Name
2019 Ekonomske teme.pdf
Size
359.39 KB
Format
Adobe PDF
Checksum
(MD5):9deea00168cce6b16f6a7dddd7d684fa