Equilibrium and Convergence in Income Distribution: The Case of 28 European Countries in the Recent, Turbulent Past (1995–2019)

Yanling Guo; Friedrich L. Sell

doi:10.2478/ceej-2021-0007

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Equilibrium and Convergence in Income Distribution: The Case of 28 European Countries in the Recent, Turbulent Past (1995–2019)

Central European Economic Journal

Volume 8 (2021): Issue 55 (January 2021)

By: Yanling Guo and Friedrich L. Sell

Open Access

|Jun 2021

Figures & Tables

The time-invariant distribution pattern of personal incomes. *Source*: Blümle (2005)

Increasing the standard deviation in the distribution of personal incomes. *Source*: Sell (2015)

Equilibrium in the distribution pattern of personal incomes. *Source*: Sell (2015)

Tab. 1

Dependent variable ΔGin_t

Model	A(1)	A(2)	A(3)	A(4)
Previous Gini	−0.053^*** (0.013)		−0.249^*** (0.030)	−0.265^*** (0.030)
Financial crisis				0.321^*** (0.110)
Austria		−0.210 (0.255)	6.417^*** (0.837)	6.676^*** (0.835)
Belgium		−0.171 (0.255)	6.588^*** (0.852)	6.855^*** (0.850)
Bulgaria		0.707^** (0.312)	9.187^*** (1.067)	9.481^*** (1.063)
Croatia		−0.267 (0.389)	7.329^*** (0.989)	7.497^*** (0.982)
Cyprus		0.246 (0.324)	7.888^*** (0.973)	8.109^*** (0.968)
Czechia		−0.143 (0.312)	6.075^*** (0.807)	6.201^*** (0.802)
Denmark		0.294 (0.283)	6.528^*** (0.800)	6.741^*** (0.796)
Estonia		−0.663^** (0.292)	7.619^*** (1.039)	7.932^*** (1.036)
Finland		0.085 (0.261)	6.342^*** (0.796)	6.553^*** (0.793)
France		−0.205 (0.268)	7.022^*** (0.910)	7.318^*** (0.908)
Germany		−0.020 (0.261)	7.017^*** (0.886)	7.278^*** (0.883)
Greece		−0.259 (0.249)	8.180^*** (1.048)	8.548^*** (1.047)
Hungary		−0.100 (0.292)	6.679^*** (0.865)	6.875^*** (0.860)
Ireland		−0.271 (0.255)	7.475^*** (0.968)	7.806^*** (0.966)
Italy		−0.175 (0.261)	7.775^*** (0.993)	8.110^*** (0.991)
Latvia		−0.071 (0.312)	8.871^*** (1.121)	9.172^*** (1.117)
Lithuania		−0.060 (0.302)	8.694^*** (1.097)	9.002^*** (1.093)
Luxembourg		0.076 (0.255)	7.023^*** (0.874)	7.302^*** (0.872)
Malta		0.071 (0.312)	6.972^*** (0.885)	7.142^*** (0.879)
Netherlands		−0.115 (0.261)	6.558^*** (0.844)	6.811^*** (0.841)
Poland		−0.473 (0.302)	7.269^*** (0.979)	7.511^*** (0.974)
Portugal		−0.281 (0.255)	8.541^*** (1.094)	8.926^*** (1.093)
Romania		−0.179 (0.312)	8.331^*** (1.071)	8.605^*** (1.066)
Slovakia		−0.408 (0.324)	5.829^*** (0.813)	5.960^*** (0.808)
Slovenia		0.006 (0.292)	5.880^*** (0.761)	6.017^*** (0.757)
Spain		0.025 (0.261)	8.351^*** (1.037)	8.710^*** (1.036)
Sweden		0.369 (0.292)	6.662^*** (0.809)	6.847^*** (0.805)
United Kingdom		0.118 (0.283)	8.179^*** (1.011)	8.528^*** (1.010)
Constant	1.482^*** (0.389)
Observations	479	479	479	479
R-squared	0.033	0.048	0.173	0.189

*** P < 0.01,

** P < 0.05,

* P < 0.1.

Tab. 2

ADF test result

Country	Stationary AIC)	Stationary (BIC)	Stationary (t-stat)	Trend sta. (AIC)	Trend sta. (BIC)	Trend sta. (t-stat)	Nobs
Austria	^**	^**	^**	^**	^**	^**	17
Belgium		^**					17
Bulgaria							14
Croatia						^***	10
Cyprus						^*	15
Czechia							15
Denmark	^***	^***	^***				17
Estonia	^***	^***	^*				16
Finland							16
France	^**	^**	^**				15
Germany	^**	^**		^***	^***	^***	15
Greece							17
Hungary		^**	^*	^**	^**	^**	15
Ireland				^***	^***	^***	16
Italy				^***	^***	^***	15
Latvia	^**	^**	^**	^***	^***	^***	15
Lithuania							15
Luxembourg				^*	^*		17
Malta	^*	^*	^*	^*	^*	^*	15
Netherlands	^***	^***	^***	^***	^***	^***	15
Poland	^**	^**	^**				15
Portugal				^**	^**	^**	16
Romania		^**	^**				13
Slovakia							14
Slovenia							15
Spain							16
Sweden	^***	^***	^***	^**	^**	^**	16
United Kingdom							14

*** P < 0.01,

** P < 0.05,

* P < 0.1.

Tab. 3

Dependent variable Gini_t

Model	B(1)	B(2)	B(3)	B(4)
logGDPpc	210.401^** (101.18)			463.717^*** (146.76)
(logGDPpc)²	−22.158^** (10.25)			−46.512^*** (15.17)
(logGDPpc)³	0.765^** (0.35)			1.541^*** (0.52)
previous Gini		0.950^*** (0.01)		0.351^*** (0.05)
Austria			−253.595^** (104.02)	−1753.78^*** (482.91)
Belgium			272.008^*** (104.02)	−1437.44^*** (479.71)
Bulgaria			−1451.324^***(108.02)	−1902.24^*** (385.60)
Croatia			500.411^* (283.47)	−1291.01** (557.56)
Cyprus			−377.443^*** (145.40)	−1706.16^*** (489.32)
Czechia			171.240 (145.40)	−1537.05^*** (512.88)
Denmark			−535.120^*** (118.87)	−1892.70^*** (480.87)
Estonia			323.865^*** (100.53)	−1448.45^*** (508.94)
Finland			123.248 (100.53)	−1460.13^*** (480.53)
France			−265.087^** (109.12)	−1737.01^*** (486.63)
Germany			−387.554^*** (117.02)	−1825.68^*** (491.62)
Greece			87.160 (104.02)	−1331.06^*** (460.23)
Hungary			−332.505^*** (104.51)	−1832.71^*** (500.85)
Ireland			155.019 (113.32)	−1520.09^*** (458.52)
Italy			−291.261^** (120.55)	−1686.74^*** (480.19)
Latvia			459.139^*** (145.40)	−1280.34^** (507.37)
Lithuania			−487.852^*** (117.02)	−1868.91^*** (510.14)
Luxembourg			−488.867^*** (104.02)	−1838.25^*** (454.26)
Malta			−181.419 (145.40)	−1882.67^*** (541.84)
Netherlands			58.677 (104.51)	−1571.00^*** (476.53)
Poland			421.547^*** (117.02)	−1298.42^*** (501.97)
Portugal			686.918^*** (110.50)	−1085.10** (483.61)
Romania			−15.311 (183.48)	−1518.38^*** (488.56)
Slovakia			596.187^*** (162.52)	−1212.39^** (526.13)
Slovenia			−199.579^* (104.51)	−1764.69^*** (504.61)
Spain			−240.605^** (100.53)	−1695.74^*** (486.51)
Sweden			−578.102^*** (113.37)	−1972.66^*** (481.94)
United Kingdom			324.630^*** (113.35)	−1358.44^*** (484.78)
Austria*TIME			0.140^*** (0.05)	0.122^** (0.05)
Belgium*TIME			−0.122^** (0.05)	−0.035 (0.05)
Bulgaria*TIME			0.739^*** (0.05)	0.198^* (0.11)
Croatia*TIME			−0.233^* (0.14)	−0.109 (0.13)
Cyprus*TIME			0.203^*** (0.07)	0.099 (0.07)
Czechia*TIME			−0.073 (0.07)	0.012 (0.07)
Denmark*TIME			0.279^*** (0.06)	0.192 (0.06)
Estonia*TIME			−0.145^*** (0.05)	−0.030 (0.06)
Finland*TIME			−0.048 (0.05)	−0.024 (0.05)
France*TIME			0.146^*** (0.05)	0.115^** (0.05)
Germany*TIME			0.207^*** (0.06)	0.159^*** (0.06)
Greece*TIME			−0.027 (0.05)	−0.087^* (0.05)
Hungary*TIME			0.179^*** (0.05)	0.160^*** (0.05)
Ireland*TIME			−0.062 (0.06)	0.008 (0.07)
Italy*TIME			0.161^*** (0.06)	0.090^* (0.06)
Latvia*TIME			−0.210^*** (0.07)	−0.112 (0.07)
Lithuania*TIME			0.260^*** (0.06)	0.180^** (0.08)
Luxembourg*TIME			0.257^*** (0.05)	0.165^*** (0.05)
Malta*TIME			0.104 (0.07)	0.185^** (0.08)
Netherlands*TIME			−0.016 (0.05)	0.032 (0.05)
Poland*TIME			−0.194^*** (0.06)	−0.105^** (0.07)
Portugal*TIME			−0.324^*** (0.06)	−0.209^*** (0.05)
Romania*TIME			0.025 (0.09)	0.006 (0.10)
Slovakia*TIME			−0.284^*** (0.08)	−0.149^* (0.08)
Slovenia*TIME			0.111^** (0.05)	0.125^** (0.05)
Spain*TIME			0.136^*** (0.05)	0.095^** (0.05)
Sweden*TIME			0.300^*** (0.06)	0.231^*** (0.06)
UK*TIME			−0.145^*** (0.06)	−0.073 (0.05)
constant	−624.115^* (331.96)	1.450^*** (0.43)
Observations	427	427	427	427
R-squared	0.185	0.913	0.933	0.946

*** P < 0.01,

** P < 0.05,

* P < 0.1.

References

Authors

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Articles in this issue

DOI: https://doi.org/10.2478/ceej-2021-0007 | Journal eISSN: 2543-6821 | Journal ISSN: 2544-9001

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Language: English

Page range: 95 - 125

Published on: Jun 11, 2021

Published by: Faculty of Economic Sciences, University of Warsaw

In partnership with: Paradigm Publishing Services

Keywords:

inequity convergence,

equilibrium,

personal income distribution,

redistributive policies,

collective decision making

JEL:

D31,

D63,

D72

Related subjects:

Business and economics,

Political economics,

Economic theory, systems and structures,

Microeconomics,

Macroeconomics,

Economic policy

© 2021 Yanling Guo, Friedrich L. Sell, published by Faculty of Economic Sciences, University of Warsaw
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Volume 8 (2021): Issue 55 (January 2021)

Equilibrium and Convergence in Income Distribution: The Case of 28 European Countries in the Recent, Turbulent Past (1995–2019)

Figures & Tables

Fig. 1

Fig. 2

Fig. 3

Tab. 1

Tab. 2

Tab. 3

Fig. 4

Fig. 5

Fig. 5

Fig. 7

Fig. 8

Fig. 9

Fig. 10

Fig. 11

Fig. 12

Fig. 13

Paradigm

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