INCOME INEQUALITIES IN EU COUNTRIES: GINI INDICATOR ANALYSIS

Abstract

Franklin Delano Roosevelt said that “the test of our progress is not whether we add more to the
abundance of those who have much; it is whether we provide enough for those who have too
little.” According to the World Economic Forum (2021), income disparity is at the top of global
risks in the coming years. The development of income inequality is a growing concern worldwide,
particularly since the Great Recession. This study is based on available data on the Gini coefficient of
equivalized disposable income from 2005 to 2019 for the 27 European Union countries. We found
that the indicator’s value demonstrates a reasonably even distribution of income (not exceeding
40%) in all European Union countries, except Bulgaria. We used the FORECAST ETS function
(Excel for Microsoft 365) that is based on the AAA version of the Exponential Smoothing (ETS)
algorithm to conduct our analysis. We grouped the EU 27 countries to investigate income equality
behavior. According to the interval’s median of the sample’s standard deviation, we selected Italy,
Spain, Germany, Slovakia, Hungary, Bulgaria for further investigation. We conclude the absence of
general trends in the inequality of income distribution in society due to the financial crisis factors.
The research presents exploratory insights into income inequality in the European Union.