Economics

EU Member States by Income Equality

Denmark ranks first among EU member states for income equality.

Governments and policymakers at large cannot overcome the challenges of poverty and social exclusion without addressing the issues of inequalities within the country, whether economic or social inequalities. The European Union has struggled with inequalities in the distribution of income over the years. Income inequality is measured by Gini coefficient and shows how evenly incomes are distributed among the population of a given country. It highlights the gap between different individuals or households’ disposable income. Income inequality among the 28 European Union countries has been falling and is much lower than other parts of the world. But how do the EU countries rank by income equality?

Country Ranking by Region

Nordic Countries

Nordic countries are among the most equal countries, not only in Europe but also in the world. Denmark and Sweden lead the list of the countries with the least income inequality among the EU countries with a Gini coefficient score of 24.8 and 24.9 respectively. The two countries rank 2nd and 4th respectively among the countries with the least income inequality in the world. Finland, another Nordic country, ranks 6th in Europe and 10th in the world with a Gini coefficient of 26.8.

Central Europe

EU member countries forming Central Europe have a relatively low-income inequality compared to other parts of Europe. The Czech Republic, with a Gini coefficient of 24.9 has the least income inequality in Central Europe, the third lowest among EU members and 5th in the world. Slovakia is ranked 4th in Europe and 6th in the world with a score of 25.6. Hungary, which ranks 10th in the world, has the 5th least income inequality with a Gini coefficient of 28.6. Germany and Slovenia rank 7th and 8th in EU respectively and also 14th and 15th in the world. Poland is the lowest ranked Central European country at position 17 among the EU countries and 44th in the world.

Western Europe

Western European countries that belong to the EU are neither among the high-income inequality countries neither are they among the lowest. However, some of the countries like Portugal, Spain, and Ireland have some of the highest income inequalities in the region. Portugal has the most income inequality among the EU countries with a Gini coefficient of 38.5. It ranks 59th in the world. The United Kingdom also has a high level of income inequality compared to other developed countries, with the income inequality much higher among original incomes compared to disposable incomes. The Netherlands, France, Belgium, and Ireland rank among the top 15 EU countries with the least income inequality. The four countries also rank among the top 40 countries with higher income equality.

Bridging the Gap

While the Nordic countries boast of high-income equality, the EU believes that there is need to reduce the inequality gap. To bridge the gap, EU countries must work towards breaking down the social barriers between the rich and the poor. Although a statutory minimum wage exists in 22 of 28 EU Countries, there is still need to increase the wages due to the changing price levels. The debate as to whether the rich should be charged more tax will not come to an end soon but it could be a solution to the income inequality witnessed in some of the countries.

EU Member States by Income Equality

RankCountryEU Rank
1 Denmark1
2 Sweden2
3 Czech Republic3
4 Slovakia4
5 Hungary5
6 Finland6
7 Germany7
8 Slovenia8
9 Austria9
10 Bulgaria10
11 Netherlands11
12 Romania12
13France13
14Belgium14
15Ireland15
16Greece16
17Poland17
18Spain18
19Estonia19
20Lithuania20
21Italy21
22United Kingdom22
23Latvia 23
24Portugal24

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