The relationship between income inequality and polarization is an empirical fact: a change in equality might occur together with a change in polarization. At the same time, polarization might emerge while inequality remains constant. The outcome of this process entails relevant information on the evolution of the income distribution. We exploit the LIS database to perform a relative distribution analysis for six European countries. Our aim is describing how disposable income distributions evolved over time. The results indicate that polarization increased in all the considered countries, being the largest in the United Kingdom and the smallest in Italy. Nonetheless, in all the countries downgrading prevails over upgrading: the relevance of the middle class getting poorer is larger than the one of the middle class getting richer.
This research was funded by the research program “Inequality and economic crises” of the 2010–2011 PRIN project 2010WKTTJP_005. The authors thank a reviewer for useful comments. We are grateful to Ben Jann for having shared the reldist Stata package with us and the LIS Staff for the constant technical support. The opinions expressed here do not involve the institutions to which the authors are affiliated.
Petrarca, I. and Ricciuti, R. (2016), "Relative Income Distribution in Six European Countries", Inequality after the 20th Century: Papers from the Sixth ECINEQ Meeting (Research on Economic Inequality, Vol. 24), Emerald Group Publishing Limited, pp. 361-386. https://doi.org/10.1108/S1049-258520160000024015Download as .RIS
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