Earnings and income inequality in the EU during the crisis

Abstract

The author examines the impact of the economic crisis on employment, earnings, inequality and poverty in the EU, focusing on Denmark, Germany, Slovakia, Spain and the United Kingdom during the period 2008-10. After reviewing the literature, he analyses recent trends, finding that during this stage of the crisis real wages reacted countercyclically in most countries, thus diverging from the pattern observed in previous recessions. He finds considerable cross-national variation in the severity and direction of changes in terms of inequality and poverty rates. However, he argues that inequality may widen because of the potential regressive effects of the announced austerity programmes. © The author 2012 Journal compilation © International Labour Organization 2012.