The European Union and Within-Country Income Inequalities. The Case of the New Member States

Abstract

Although addressing income inequalities is one of the main challenges in the European Union (EU) Member States, whether the EU has influenced income distributions, even possibly causing a rise in inequalities, is still a heavily underexplored topic. Using the newest methodological developments associated with the counterfactual estimations, I was able to estimate the distributional effects of the 2004 EU enlargement, conduct an inference procedure, as well as escape the problem of cherry-picking. The results indicate that EU accession cannot be held responsible for any significant changes in income inequalities in the New Member States. That finding is robust to changes in the method of estimation, and it is also supported by dynamic panel data methods.