The possible impact of changes in demography on economic inequality in Europe

This chapter examines the impact of demographic changes on economic inequality across Europe. Some of the major ongoing demographic changes include age composition, number of singles (and single parents), education, and assortative mating. Data are used from the European Union SILC survey covering 2006 to 2019 across 30 EU member countries. Inequality assessed from the equivalized household disposable income (after taxes and transfer) decreased slightly on average during the period, with half of the countries experiencing a decrease and half experiencing an increase. A decomposition analysis using the Blinder-Oaxaca method suggests a limited role of the demographic changes in determining development in economic inequality. Findings point to the roles of policy changes in taxes and transfers (governmental impact), together with changes in the market economy (private sector impact) as probably the most important drivers of change in inequality across many countries.