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History and Prospects of Inequality between
Europeans¤
Christian Morrisson, Fabrice Murtiny
November 6, 2003
Abstract
This article provides the …rst study of inequality and poverty in the
European Union from 1970 to 2040. The distribution of disposable in-
come shows a large decrease of absolute poverty over the last decades,
whereas inequality has not changed since 1980 after a fall in the 70s. The
comparison between the two distributions of disposable income and fac-
tor income respectively, allows an estimate of redistribution: this becomes
more important when factor inequality increases. The total inequality is
decomposed between inequality within countries and inequality between
countries. The latter accounts for a low and decreasing share of total
inequality. Moreover, the study of the convergence processes of GDP per
capita and inequality within countries allows, with population projections,
to estimate the European distribution for the next 40 years with 27 coun-
tries, an enlargement which will entail a large and persistant increase of
inequality and of absolute poverty.
The best index of the economic performance of the European Union is the
rate of growth of GDP per capita. One could add to this index the weight of
the Union in world trade, the rate of growth of total factor productivity since
the latter reveals the quality of the governance and the impact of technology
growth . But such indexes do not give informations on social aspects which
concern Europeans as much as the rate of growth of GDP per capita.
In a social and political perspective, the distribution of disposable income
is a pertinent index because tensions in social relations are linked to inequality
of d
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