National fiscal consolidations and regional inequality in Europe

Giorgio Fazio, Luca Agnello, Ricardo M. Sousa, Giorgio Fazio

Research output: Contribution to journalArticlepeer-review

13 Citations (Scopus)

Abstract

Using annual data for 13 European countries over the period 1980-2008, we assess the impact of national fiscal consolidations on the income inequality of European regions. Regional dispersion increases in the outcome of consolidation episodes, particularly, when packages are more severe and implemented through spending cuts rather than tax rises. From a policy perspective, these findings suggest that fiscal consolidations driven by reductions in government spending can exacerbate regional disparities and may ultimately counteract the European policy efforts to promote territorial cohesion. Our results are robust to alternative inequality measures, the occurrence of crisis episodes and the exclusion of fiscal outliers.
Original languageEnglish
Pages (from-to)59-80
Number of pages22
JournalCambridge Journal of Regions, Economy and Society
Volume9
Publication statusPublished - 2016

All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Sociology and Political Science
  • Economics and Econometrics

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