Income inequality, decentralisation, and regional development in Western Europe

V. Tselios, A. Rodriguez-Pose, A. Pike, J. Tomaney, Gianpiero Torrisi

    Research output: Working paper

    225 Downloads (Pure)

    Abstract

    This paper deals with the relationship between decentralisation, regional economic developement and income inequality with in regions. Using multiplicative interaction models and regionally aggregated microeconomic data for more than 100,000 individuals in the European Union (EU), it addresses two main questions. First whether fiscal and political decentralisation in Western Europe has an effect on within regional interpersonal inequality. Second, whether this potential relationship is mediated by the level of economic development of the region. The results of the analysis show that greater fiscal decentralisation is associated with lower interpersonal income inequality, but as regional income rises, further decentralisation is connected to a lower decrease in inequality. This finding is robust to the measurement and definition of income inequality, as well as to the weighting of the spatial units by their population size.
    Original languageEnglish
    Place of PublicationSpain
    PublisherImdea
    Number of pages38
    Publication statusPublished - Sept 2011

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