How was Income Inequality Affected by the Eastern Enlargement in the EU?
Abstract: Due to the recent debate about income inequality, the need to find its determinants has never been more important. Economic integration has recently entered the discussion as one possible force for inequality. By looking at the eastern enlargement of the European Union (EU) as an example of economic integration I am able to analyze the relationship between economic integration and within-country income inequality. The focus will be on the Central and East European Countries (CEEC) and the outcome of them being integrated into the EU. The analysis covers the years between 1995 and 2013 where economic integration is decomposed into potential integration and realized integration. My findings suggest that becoming a member of the EU has increased income inequality for the CEECs, while additional member countries have increased income inequality for the EU15. Therefore, economic integration does seem to increase income inequality in Europe.
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