Inequality, growth and mobility: the inter-temporal distribution of income in European countries 2003-2007

Inequality, growth and mobility: the inter-temporal distribution of income in European countries 2003-2007 (...)

This paper exploits longitudinal EU-SILC data 2003–2007 to describe the inter-temporal distribution of income in twenty-six European countries. We document levels, inequality and progressivity in the distribution of year-on-year income gains and losses and examine the consequences of these on inequality and poverty when, in contrast to the standard cross-section approach, incomes are aggregated over more than one year. The key observation is that new Member States have typically seen incomes grow faster than other countries, and inequality of gains has not necessarily been larger. However, on this last point, experiences have been diverse. Overall, over the short time span we are able to look at, income mobility makes little to reduce inequality of aggregated incomes. Furthermore potential issues about cross-country comparability of the data and the short period under consideration call for caution in interpreting our results. (...)