Full text: Wirtschaft und Gesellschaft - 2018 Heft 2 (2)

Figure 8: Regional contributions to each country’s Theil index
(2014 data)
5.1 Employment and productivity
The distribution of inequality in the European Union can also be decom-
posed into an employment and a productivity effect. Some interesting con-
clusions arise. In Figure 10, we observe an ascending trend in inequality
for countries belonging to the old EU „core“, which is most pronounced for
EU-12, and to a slightly lesser extent, EU-15.
The traditional driver of total inequality between countries and regions is
productivity. However, the gap between productivity and employment has
narrowed significantly in recent years, and has even been closed for EU-12
and EU-15 countries, with employment effects becoming the main source
of inequality. This indicates that the countries belonging to the old EU core
have been affected most by employment effects, in particular following the
financial crisis of 2007. While disparities in productivity are decreasing in
recent years for EU-12 and EU-15 regions, they have remained almost un-
changed, whereas the distribution of employment is becoming more un-
equal, in a manner significant enough to drive total inequality to rise.
Wirtschaft und Gesellschaft 44. Jahrgang (2018), Heft 2

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