An empirical analysis of income convergence in the European Union

Cavenaile, Laurent; Dubois, David

doi:10.1080/13504851.2011.560104

Cited by 58 publications

(39 citation statements)

References 16 publications

(16 reference statements)

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“…The EU enlargement "to the East" in the first decade of this century has contributed to a significant increase in the number of the studies testing the theorem on the convergence of the GDP per capita. In a number of works (Matkowski & Próchniak, 2004;Kutan & Yigit, 2004;Kutan & Yigit, 2005;Varblane & Vahter, 2005;Próchniak, 2008;Vojinovic & Oplotnik, 2008;Vojinovic, Acharya & Próchniak, 2009;Cavenaile & Dubois, 2011), the authors came to the conclusion that the patterns of the economic growth of the new member states (NMS) in the 1990s and the first decade of the 21st century were in accordance with the income convergence theorem.…”

Section: The Theoretical Basis Of Income Convergence and The Literatumentioning

confidence: 94%

“…Proširivanje EU "na istok" u prvoj deceniji XXI-og veka doprinelo je značajnom porastu broja studija u kojima se testira Teorema o konvergenciji BDP per capita. U brojnim radovima (Matkowski & Prochniak, 2004;Kutan & Yigit, 2004;Kutan & Yigit, 2005;Varblane & Vahter, 2005;Prochniak, 2008;Vojinovic & Oplotnik, 2008;Vojinovic, Acharya & Prochniak, 2009;Cavenaile & Dubois, 2011), autori su došli do zaključka da je ostvareni ekonomski rast novih članica EU (NMS) tokom 1990-ih godina i u prvoj deceniji XXI-og veka bio u skladu sa Teoremom o dohodovnoj konvergenciji.…”

Section: Slika 3 Kretanje Prosečnog Bdp Per Capita (Po Paritetu Kupovunclassified

“…L. Cavenaile and D. Dubois (2011) examined the process of income convergence between the ten new member states (NMS) and the EU-15 in the period between 1990 and 2007. The results showed significant differences among the new member states in terms of the speed of their catching up with the average income of the EU developed countries.…”

Section: The Theoretical Basis Of Income Convergence and The Literatumentioning

confidence: 99%

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Income convergence in the process of the Western Balkan states' accession to the European Union

Stanišić¹

2016

Ekon horizonti

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One of the main expectations in European transition economies is that the processes of building the market economy and European integrations lead to a significant increase in the living standard, as well as to catching up with the level of the income per capita achieved in developed European economies. A quarter century after the beginning of transition, many of the former socialist countries joined the EU and significantly increased their GDP per capita. On the other hand, transition in the countries of the so-called Western Balkans has disappointed in this sense. The paper tests the existence and speed of income convergence in the Western Balkan states and developed EU countries, in comparison with the so-called "New Member States". The results indicate that, despite the achieved income convergence in the pre-crisis years, the outbreak of the global economic crisis has revealed many structural and reform problems that the countries of the region have been facing for a long time. Catching up with developed EU members' average GDP per capita stopped in the Western Balkan states after the beginning of the crisis, with a simultaneous increase in the income gap between the Western Balkan states and the new EU member states.

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Section: The Theoretical Basis Of Income Convergence and The Literatumentioning

confidence: 94%

Section: Slika 3 Kretanje Prosečnog Bdp Per Capita (Po Paritetu Kupovunclassified

Section: The Theoretical Basis Of Income Convergence and The Literatumentioning

confidence: 99%

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Income convergence in the process of the Western Balkan states' accession to the European Union

Stanišić¹

2016

Ekon horizonti

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“…However, when allowing for structural breaks, they provide evidence in favor of a catch-up process during the 1990s-2003 period for three of the CEEC (Poland, the Czech Republic, and Hungary) towards Germany and only for Poland towards the US economy. Finally, Cavenaile and Dubois (2011) find conditional β-convergence of real income per capita for the EU-27 between 1990-2007. Nevertheless, they show that the rates of convergence of the new entrants from Central and Eastern Europe and of the 15 Western countries significantly differ, pointing to the existence of different groups of convergence in the European Union.…”

Section: Related Literaturementioning

confidence: 99%

The evolution of economic convergence in the European Union

2014

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Reproduction permitted only if source is stated.ISBN 978-3-86558-941-5 (Printversion) Non-technical summary Western European countries took major steps toward economic integration in recent decades, including the liberalization of capital and labor markets and the foundation of the European Economic and Monetary Union (EMU). The 1992 Maastricht Treaty set an agenda for macroeconomic convergence prior to entering the monetary union, and the European Commission has put forward numerous policy initiatives aimed at the reduction of regional economic disparities and improving competitiveness among EU members. Meanwhile, in Central and Eastern European countries (CEEC) important political and institutional changes were undertaken in the 1990s. These involved sizable macroeconomic adjustment processes, e.g., transition from planned to market economy, liberalization of prices, and privatization of state assets.Starting from the hypothesis that closer economic integration between countries may lead to increased real income per capita convergence, this paper investigates convergence in real incomes per person between the 27 current member states of the EU for the time horizon 1970-2010. We employ an empirical convergence test derived from a neoclassical growth model augmented with endogenous technological progress which differs across countries and over time. The model implies that the transition path of each economy toward the steady state level of per capita real income depends on country-specific technological growth rates. This approach enables us to study various types of economic transition behavior, e.g., temporary divergence followed by catching-up and convergence. In addition, the convergence test is applied in an iterative manner in order to identify convergent country groups, or so-called 'convergence clubs'.Our results offer important insights on the economic catch-up exhibited by the new EU members in light of the institutional changes and macroeconomic adjustment processes experienced in recent decades. The main results can be summarized as follows. We do not find overall real income per capita convergence in the EU. This result is robust to any time horizon considered. Instead, we discover country groups that converge to different income levels in the long-run. Regional linkages seem to play a significant role in determining the formation of convergence clubs. Yet, eurozone countries belong to distinct subgroups, thus clustering is not necessarily related to EMU membership. Moreover, there is a clear separation between the CEEC and the old EU members in the long run, suggesting that, even though the CEEC have exhibited higher real income growth than the EU average over the last 40 years, catching up was not sufficient in order to eliminate cross-country real income per capita differences. Finally, we observe a South-East vs. North-West division of European economies by the mid-nineties.Our results draw attention to the lack of growth-enhancing structural reforms in EU countries, posing a threat to the achi...

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“…Cavenaile and Dubois (2011) also find evidence for β-convergence (i.e., poorer EU members growing faster than the richer EU members) between the CEE members and the rest of the EU. Trade and FDI have been important drivers of convergence: the trade agreements between the EU-15 and the EU-10 (i.e., the Interim Agreements and the Europe Agreements) led to substantive contributions to GDP and welfare (Egger & Larch, 2011).…”

Section: Economic Outcomesmentioning

confidence: 86%

Does Joining the EU Make You Happy? Evidence from Bulgaria and Romania

Nikolova

Nikolaev

2016

J Happiness Stud

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I EIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. Although EU membership is among the most important events in Bulgaria and Romania's modern histories, there is no evidence on how it affected the subjective well-being of ordinary people in the two countries. Using a difference-in-differences strategy and Eurobarometer data, we provide the first evidence that joining the EU increased average life satisfaction in Bulgaria and had a positive but statistically insignificant effect in Romania. One explanation is that trust towards the EU increased only in Bulgaria but not in Romania after both countries joined in 2007. Furthermore, Romania's political war of 2007 may have mired the country's positive life satisfaction experiences related to EU membership. We also show that the younger, the employed, and those with a high-school education were the winners from EU integration. Our results are robust to two placebo tests, in which we use two fake entry dates to the EU, and to an estimation using bootstrapped standard errors. Our findings have implications for EU integration policy and future enlargements.JEL Classification: I31, I39, P20

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An empirical analysis of income convergence in the European Union

Cited by 58 publications

References 16 publications

Income convergence in the process of the Western Balkan states' accession to the European Union

Income convergence in the process of the Western Balkan states' accession to the European Union

The evolution of economic convergence in the European Union

Does Joining the EU Make You Happy? Evidence from Bulgaria and Romania

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