Measurement of income distribution in supranational entities: the case of the European Union

Abstract

The rapidly growing literature on world income inequality has drawn attention to the measurement of income distribution in supranational entities. This exercise raises some new problems, like the conversion to a common currency standard, but mainly forces us to see in a different light questions that are encountered in studying income distribution at the national level. Developing these issues is one aim of this chapter. However, I shall not take the entire world, but the European Union (EU) as my case study. The first reason for doing so is that the abundance and quality of available data and statistics for the EU allow me to examine in depth the questions involved in deriving the distribution of income in a supranational entity. The second reason is that EU member countries are engaged in a process of economic and political unification which has no parallel at the global level. This gives EU-wide indices of poverty and inequality a significance that goes well beyond intellectual curiosity.