Analysis of income inequalities in the pre-pandemic COVID-19 period

Abstract

The degree of income inequality has increased in recent years in most EU Member States, raising concerns from both the perspective of sustainable growth and social cohesion. Given that the Europe 2020 strategy focuses on poverty reduction, we must keep in mind that this phenomenon is closely linked to income inequality. In this article, an analysis was carried out on the evolutions of the main indicators of income inequality (Gini index and the S80/S20 quintile ratio) in the European Union and in Romania. Several income concepts were investigated: disposable income with social transfers, disposable income without social transfers, with or without the inclusion of pensions in social transfers. The evolution of the indicators for measuring income inequalities has indicated that both in the European Union and especially in Romania, inequalities have increased, and this increase is more pronounced for market income inequality (i.e. inequality before taking into account taxation and social transfers) as the tax and social security system has an equalizing effect.

Keywords

• income inequalities
• gini coefficient
• disposable income