Developments in income inequality and the middle class in the EU

This report provides a comprehensive examination of trends in income inequality within and between the EU Member States from 2006 to 2021. The study also aims to answer the related question of whether the middle class is becoming smaller because of developments in respect of disparities in household disposable income. A robust analysis is conducted using a wide range of interrelated indicators, including income inequality; income levels across Member States and along the income distribution; the size of the middle class; the share of national income received by different income groups; and poverty rates and other indicators of economic hardship experienced by European households. The role of public policies in explaining some of these trends is also examined. The results indicate that although income inequality has been relatively stable on average across the Member States, trends are much more mixed at Member State level, while the size of the middle class has shrunk in most of them.