This study examines the role of European integration as a potential source of income inequality in countries of the European Union. We distinguish between both economic and political integration and identify theoretical mechanisms that link the two to rising levels of inequality. The empirical analysis draws on time-series-cross-section data covering 14 European Union member states for the time period 1999-2010. In particular, we make use of a newly available dataset that measures individual degrees of integration across different dimensions. Our main finding is a positive association between political integration and inequality on the one hand as well as a nonassociation between economic integration and inequality on the other hand. This suggests that the recent trend toward inequality at the European Union national level is at least partly related to deepening political integration at the supranational level.

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How does European integration affect the welfare state? This paper argues that European integration has non-complementary consequences for the political economy of welfare spending: European economic integration increases popular demand for social spending, whereas European political integration decreases the supply of social spending. Thus, the conflicting implications of European integration essentially break the link between social policy preferences and social policy. Using statistical models that deal with the multilevel structure of the theoretical argument, we provide evidence for a positive relationship between economic integration and support for social policy. In the second part of the empirical analysis, we find that-based on dynamic model specifications at the country level-higher levels of political integration are associated with lower levels of social spending. Furthermore, we show that social policy responsiveness declines as political integration increases.

How do the labor market risks associated with technological change affect policy preferences? We argue that higher perceptions of technology-related risks should increase support for compensation and decrease support for social investment. We expect the opposite effect for individuals who use technology constantly at work, have a university degree and earn higher incomes. However, as the perception of technology-related employment risks in the latter group of individuals increases, so does their preference for compensatory and protective policy solutions to technological change. Our expectations are confirmed by novel data from a survey of 24 diverse Organisation for Economic Co-operation and Development (OECD) countries that includes specifically designed questions on technology-related risks and policy preferences. The results suggest that technology-related risks not only correlate with certain demographic and occupational characteristics, but also cross-cut them. Thus, technology-related risks might not only become a source of new cleavages between the losers and winners of technological change, but also the basis for new cross-class coalitions.

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