European integration and the political economy of inequality

Abstract

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.

Regional Integration and Income Inequality in ECOWAS Zone

“…With a random and a fixed-effect analysis, he discovered that economic and political integration increase income inequality. Busemeyer and Tober (2015) measures the extent of European integration relying on a new dataset covering 14 European Union member states over the period of 1999~2010 and finds an evidence for a positive and statistically significant relationship between regional political integration and inequality. However, economic integration exhibits no systematic association with the Gini coefficient.…”

“…First, political integration affects inequality through national fiscal policies. Higher levels of political integration are associated with lower levels of public spending in general and social spending in particular (Busemeyer and Tober 2015). Second, political integration transfers political responsibility from the national government to the regional union (Beckfield 2006).…”

The Social Inclusion and Inequality Nexus: EU versus non‐EU migrants

“…For instance, Kosonen (), Boje et al. (), Beckfield () and Busemeyer and Tober () observe the same relationship and argue that social inclusion of immigrants increases income inequality. On the other hand, Moses () claims that social inclusion may reduce income inequality through the process of globalization and integration.…”

“…There is very limited literature available on the topic, however, few studies have focused on the political, economic, and social dimension of social inclusion of immigrants. For instance, Kosonen (1995), Boje et al (2013), Beckfield (2006) and Busemeyer and Tober (2015) observe the same relationship and argue that social inclusion of immigrants increases income inequality. On the other hand, Moses (1995) claims that social inclusion may reduce income inequality through the process of globalization and integration.…”

“…A key European goal is to provide equal employment opportunities and reduce the income gap between rich and poor (Beckfield, ; Busemeyer and Tober, ). Therefore, analysing the relationship between social inclusion of migrants and income inequality is in the interest of both academics and policymakers.…”