Eurozone inequality proves economic catch-up by poorer states isn’t a given | Torsten Bell

A fifth of EU-wide income disparity is down to the difference between countries, with those in the euro area faring worst

Economists generally study inequality - how big income gaps between households are - at the national level. That's understandable given it's where major policy choices tend to happen, but this can sideline other issues such as global inequality (income inequality between individuals around the world is traumatically high but encouragingly falling). Fascinating new research looks to fill another such gap: inequality trends across the EU.

Unsurprisingly, EU-wide inequality is high - similar to that of Latvia, the third-most unequal EU member - but it's lower than in the United States. Importantly, 20% of EU inequality is down to income gaps between rich and poor member states, while just 1% in the US relates to differences between the states. The importance of these gaps in determining overall inequality between individuals across the EU helps explain the most interesting finding of the research: EU inequality has declined post-financial crisis, but in the euro area inequality has been slightly increasing.

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