Regional inequality in Portugal

Abstract

Inequality, especially income inequality, is the main reason for several social problems, among which the reduction of social cohesion and consequent rising criminality, health and scholar decline, among others. Income inequality is related with the uneven distribution of income, which often results in different opportunities for the individuals, which may even find themselves in cases of extreme poverty. Income is not equally distributed across any country and varies across geographical space. This study supports the idea that it is fundamental to not simply analyze income inequality at the National level, but also analyze how inequality varies across different degrees of urbanization, namely: (i) large urban areas, (ii) small urban areas, and (iii) rural areas. Moreover, we go beyond the standard Gini index, which is sensitive to changes at the middle of the income spectrum, but almost blind to shifts at the upper and bottom deciles, and apply several income share ratios as alternative inequality indicators, allowing us to infer about differences between deciles of the income distribution. Compared with other European countries, Portugal has a medium level of inequality. However, this study concluded that income inequality in Portugal has been decreasing since 2015 and that among the three degrees of urbanization, large urban areas contain the higher levels of inequality (even though rural areas presented a slight increase in 2019). The progressive tax system is one of the measures taken to reduce inequality. Furthermore, our analysis is done in terms of individuals and not households, which identifies levels of inequality that are “smoothed” by the later.

Date of Award	14 Jul 2021
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	José Maria Gaspar (Supervisor) & Carlos Seixas (Co-Supervisor)