Mobility and income inequality in the European Union and in Portugal

This article aims at establishing some facts on mobility and income distribution in the European Union countries, with a special focus on the Portuguese case. The analysis was developed with the latest information from the EU-SILC database, for the period 2005-2009. There is substantial mobility between the various income deciles in the EU and, to a lesser extent, in Portugal. Income mobility decreases the degree of inequality in non-negligible terms, but the fraction of inequality that takes a permanent nature remains quite high in all EU countries and in particular in Portugal. Additionally, there is no relation between the level of inequality and the contribution of income mobility to the reduction in inequality in the EU countries. In the recent past, income growth in the EU countries, including Portugal, was skewed towards lower income individuals. However, the contribution of this “progressive” growth to the reduction of inequality was mitigated, or even canceled, by the re-ranking of individuals in the income distribution.