WHAT DOES GREATER ECONOMIC INTEGRATION MEAN FOR INTERREGIONAL INCOME INEQUALITY? AN ANALYSIS OF OECD COUNTRIES AND REGIONS

This paper provides an overview of the evolution of interregional income disparities among 304 regions from 27 OECD countries between 1995 and 2005. This sample of regions allows to compare interregional income inequality in different economic integration systems: the USA (used as an example of a political union), the European Economic and Monetary Union (EMU), the European Union (EU), and the North-American Free Trade Agreement (NAFTA). Overall, interregional income inequality is lower among US states and EMU regions than among EU regions and NAFTA regions. Thus, interregional income inequality seems to be negatively related to economic integration. However, income inequality has risen among US states, while it has been stable among OECD regions, and has even decreased among European regions. Moreover, rank-size scatterplots suggest that inequality is higher among low-income regions than among richer regions.