Poverty and Inequality

This chapter is about the state of inequality and poverty in Europe. We observe differences in poverty rates and income inequality across European countries. At the one extreme, there are the Benelux and Nordic countries with little poverty and small inequalities. At the other extreme, there is a mixed group consisting of Southern, Eastern, and Anglo- Saxon countries. Changes in poverty and inequality over time have been rather small. A number of reliable signals, such as aging and restrictive public finance point to an increase of poverty and inequality in the near future. Finally, we show that beyond the traditional social polarization based on income and wealth, there is a deeper and multicausal divide that represents the most serious challenge to our welfare states.