<abstract xmlns="http://www.w3.org/1999/xhtml"><p> The article examines the impact of financialization on income inequality between 2004 and 2013, through a panel analysis of seven European countries. Moreover, it attempts to examine differences in the perception of the phenomenon between the selected European countries belonging to the G-7 and countries from Central and Eastern Europe. The results demonstrate the existence of individual effects, which means that the level of inequality under examination is influenced predominantly by country-specific factors. The most significant correlation is noticeable between the level of unemployment and the degree of income inequality. An increase in unemployment is accompanied by a rise in the disproportions in the level of income that individual citizens have at their disposal whereas a decrease in the unemployment level contributes to an improvement of the GINI coefficient. Simultaneously, the results confirm the existence of significant correlations between the level of the GINI coefficient and such financialization indicators as the share of employment in finance in total employment and the contribution of the financial sector to total value added creation. The most prominent dependency was discovered when a constructed synthetic indicator was adopted as an indicator of financialization. At the same time, analysis of the synthetic country financialization indicator points to a conclusion that the level of financialization is higher in European countries belonging to the G-7 (especially Great Britain) than in countries from Central and Eastern Europe. </p></abstract>

The article examines the impact of financialization on income inequality between 2004 and 2013, through a panel analysis of seven European countries. Moreover, it attempts to examine differences in the perception of the phenomenon between the selected European countries belonging to the G-7 and countries from Central and Eastern Europe. The results demonstrate the existence of individual effects, which means that the level of inequality under examination is influenced predominantly by country-specific factors. The most significant correlation is noticeable between the level of unemployment and the degree of income inequality. An increase in unemployment is accompanied by a rise in the disproportions in the level of income that individual citizens have at their disposal whereas a decrease in the unemployment level contributes to an improvement of the GINI coefficient. Simultaneously, the results confirm the existence of significant correlations between the level of the GINI coefficient and such financialization indicators as the share of employment in finance in total employment and the contribution of the financial sector to total value added creation. The most prominent dependency was discovered when a constructed synthetic indicator was adopted as an indicator of financialization. At the same time, analysis of the synthetic country financialization indicator points to a conclusion that the level of financialization is higher in European countries belonging to the G-7 (especially Great Britain) than in countries from Central and Eastern Europe.

Financialization and Income Inequality in Selected European Countries, 2004–2013

Financial Internet Quarterly

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

The article examines the impact of financialization on income inequality between 2004 and 2013, through a panel analysis of seven European countries. Moreover,...

Financialization and Income Inequality in Selected European Countries, 2004–2013

Published Online: Aug 01, 2017

Page range: 20 - 32

Received: Jul 01, 2015

Accepted: Nov 02, 2016

DOI: https://doi.org/10.1515/fiqf-2016-0005

Keywords
financialization, inequality, the Gini coefficient, income distribution, Central and Eastern European countries

© 2017

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Financialization and Income Inequality in Selected European Countries, 2004–2013

Published Online: Aug 01, 2017

Page range: 20 - 32

Received: Jul 01, 2015

Accepted: Nov 02, 2016

DOI: https://doi.org/10.1515/fiqf-2016-0005

Keywordsfinancialization, inequality, the Gini coefficient, income distribution, Central and Eastern European countries

© 2017

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
financialization, inequality, the Gini coefficient, income distribution, Central and Eastern European countries