EC4333 Lecture 9: Inequality in the EU

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EC4333 Lecture 9: Inequality in the EU

We have seen how the EU has affected economic growth and development across the EU in previous lectures. In this lecture, we will examine how the EU affects the social fabric of its constituent societies, through a series of cohesion funds. We will look at the definitions of inequality in the economics literature, develop some tools to measure this inequality, and expose these tools to available data.

The origins of EU social policy can be found in all three of the original treaties founding the European Communities. Article 46 of the Treaty of Paris establishing the European Coal and Steel Community refers to the improvement of the living and working standards of workers in the coal and steel industries. The Euratom Treaty sets out provisions for the health and safety of workers in the civilian atomic energy industry. By far the most extensive treatment of social policy is to be found in the Treaty of Rome, which refers to:

Free movement of workers (Articles 48–51);
Improvement in working conditions and in standards of living (Articles 117–128);
Equal opportunities for men and women (see Box 14.1) (Article 119); and
The creation of the European Social Fund (Article 123).

In this lecture, I aim

To examine the role of the social cohesion funds in the development of economic integration
To discuss their history and potential economic effects and affects.
To develop the Gini coefficients and Lorenz curves for individual countries and discuss the role of income distribution and redistribution

Activity

Students will construct a hypothetical Lorenz curve in class.

Michie, J., `Unemployment in Europe', in Amin and Tomaney, eds. Behind the Myth of European Union: Prospects for Cohesion}, Routledge Press, 1995, pgs. 51--82. 337.14 AMI.

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December 10th, 2019

Stephen Kinsella

Economist at the University of Limerick