INCOME INEQUALITY AND INNOVATIVENESS: AN APPLICATION FOR EUROPEAN COUNTRIES

The major aim of this paper is to elaborate the relationship between tech- nological change and income distribution for 18 developed EU countries. A panel data model is estimated for the data covering the period between 1999-2014. The results suggest that, technological progress occurred in EU countries works to the detriment of people who hold the top income shares. Moreover, the institutional variable is found to increase income inequality. The results underline some important lessons for developing countries.