Understanding the decline of income inequality in the EU

Flavius Niculescu

Between 2007 and 2019, inequality within many EU countries increased, while inequality between countries declined. This column examines these seemingly contradictory trends, as well as the role played by market inequality and redistribution. Most of the progress has been driven by rising labour incomes in lower-income countries. Changes in employment, education, and demographics had a minor impact on reducing inequality. By more effectively targeting disadvantaged regions and vulnerable groups,