Effect of privatisation on income inequality: A European analysis

Abstract

This study analyses the link between privatisation reforms and income inequality on a sample of 25 European countries between 2003 and 2013. Previous literature has related privatisations with the level of poverty, welfare, and well-being of population, but findings regarding income inequality are scarce, especially in the European context. The empirical results of this study suggest a positive link between both topics, for different indicators of privatisation and inequality. Concretely, findings suggest that income inequality is higher in countries that have resorted to privatisation reforms to a greater extent. Then, social consequences should be considered when evaluating regulatory reform, such as privatisation.