Inequality in Europe: the role of EU enlargement

Abstract We study income inequality in the European Union (EU) following its 2004 enlargement. Using data from the World Inequality Database, we find convergence not only in cross-country GDP per capita but also across the entire income distribution. Despite rising inequality within some countries, strong income growth also for the poor in Eastern Europe has decreased inequality in the EU as a whole. In contrast, older member states exhibit divergent income trends with stagnation among lower-income groups and growth concentrated at the top. This has systematically shifted the EU-wide income ranking, with many income groups in pre-2004 EU countries—particularly in Southern Europe—falling in rank while most income groups in the new member states have moved up in rank. These findings may be important to understand shifts in attitudes toward the EU and offer insights relevant for future EU enlargements, in particular the accession of countries such as Ukraine, Moldova, and Georgia.