Convergence: Economic dimension
To measure economic convergence, Eurofound monitors the following indicators: GDP per capita; income inequality; disposable income per household.
GDP per capita, 2000–2021
There was a statistically significant catching-up process regarding gross domestic product (GDP) per capita in the EU27 between 2000 and 2021. However, the standard deviation increased, suggesting that disparities between Member States increased, as did the unweighted EU average. This indicates a scenario with beta convergence and upward sigma divergence. The financial crisis affected convergence by worsening performance but also decreasing disparities. The first half of the COVID-19 pandemic saw disparities increase at a steep rate, as best performing countries increased their lead (upward divergence). The charts below show regional disparities in GDP per capita.
Income inequality, 2008–2021
Prior to the financial crisis, there had been a convergence process among EU Member States in income inequality, as measured by the quintile share ratio (S80/S20: the ratio of total income received by the 20% of the population with the highest income (top quintile) to that received by the 20% of the population with the lowest income (lowest quintile)).
This was disrupted during 2011–2015 when there was a period of downward divergence. Afterwards, the EU returned to a path of improving performance and convergence. However, this progress is once again threatened by the impact of the COVID-19 pandemic as lagging countries seem to be falling further behind. This shows the need for national and EU-wide support measures to lessen the burden of the pandemic and Russia’s invasion of Ukraine.
Disposable income per household, 2000–2021
There was statistically significant beta convergence between 2000 and 2021 as laggards caught up to leaders in terms of the disposable income per household in the EU. The average disposable household income increased and Member State performance improved across the board. Disparities between countries fluctuated, but there had been a process of convergence since 2014 that was reversed in 2019 by the impact of COVID-19. Since 2019, there has been upward sigma divergence (increasing performance coupled with increasing disparities).
