Jianu, Ionu ; Tudo ache, Ma ia-Daniela; Simion, Cons an in-S e an
Con e ence Pape — Published Ve sion
Assessing he Impac o Ins i u ions on Social
De elopmen
Sugges ed Ci a ion: Jianu, Ionu ; Tudo ache, Ma ia-Daniela; Simion, Cons an in-S e an (2025) :
Assessing he Impac o Ins i u ions on Social De elopmen , In: Busu, Mihail (Ed.): 19 h
In e na ional Con e ence on Business Excellence. P oceedings, Sciendo, Wa saw, pp. 907-915,
h ps://doi.o g/10.2478/picbe-2025-0071
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DOI: 10.2478/picbe-2025-0071
© 2025 I. Jianu; M.-D. Tudo ache; C.-Ș. Simion, published by Sciendo.
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Assessing he Impac o Ins i u ions on Social De elopmen
Ionuț JIANU*
Bucha es Uni e si y o Economic S udies, Bucha es , Romania
*Co esponding au ho , [email p o ec ed]
Ma ia-Daniela TUDORACHE
Bucha es Uni e si y o Economic S udies, Bucha es , Romania
[email p o ec ed]
Cons an in-Ș e an SIMION
Bucha es Uni e si y o Economic S udies, Bucha es , Romania
[email p o ec ed]
Abs ac . This pape examines he impac o ins i u ions on income inequali y in 27 Eu opean Union
membe s a es o e he pe iod 2011-2022, using he me hod Panel Es ima ed Gene alized Leas Squa es.
To ca ch he quali y o ins i u ions we used Wo ld Go e nance Indica o s published by Wo ld Bank,
especially hose ela ed o ule o law and poli ical s abili y and absence o iolence/ e o ism. The esul s
con i med a nega i e ela ionship be ween ins i u ional quali y ( ule o law, poli ical s abili y and absence
o iolence/ e o ism) and income inequali y, indica ing ha he quali y o he ules d i ing human ac ion
eally ma e and in luences he dynamic o social de elopmen . In addi ion, we used addi ional a iables
o imp o e he quali y o he model, by using a iables ela ed o labou ma ke , educa ion and household
sec o s. In his espec , we ound a posi i e associa ion be ween income inequali y and o he explana o y
ac o s, such as school d opou , unemploymen a e and he housing cos o e bu den a e. E en i he model
is limi ed o i e income inequali y d i e s, we ha e demons a ed ha he calcula ed coe icien s a e no
a ec ed by mul icollinea i y o o he model issues. In his espec , he es ima ion p o ides high con idence
esul s, which can be ully aken in o conside a ion by go e nmen s, when d a ing policy measu es o ien ed
o ackle income inequali y.
Keywo ds: income inequali y, ule o law, poli ical s abili y, ins i u ions, ea ly lea e s
In oduc ion
Income inequali y is a signi ican social challenge wi h a - eaching nega i e e ec s wo ldwide,
and s ands as one o he mos p o ound and p essing challenges o hese imes, in luencing no only
economic pe o mance bu also social cohesion and poli ical s abili y. In bo h de eloped and
eme ging economies, pe sis en dispa i ies in income dis ibu ion ha e been linked o diminished
economic esilience, educed social mobili y, and e en poli ical un es . In he Eu opean Union,
whe e a commi men o social inclusion and sus ainable g ow h is a undamen al policy goal, he
dynamics o income inequali y ha e ga ne ed conside able a en ion among esea che s and
policymake s alike. This issue emains a highly deba ed opic, as EU au ho i ies a e commi ed o
os e ing social inclusion h ough a ious p og ams and ini ia i es. I wo hs o be men ioned ha
high income inequali y educes economic esilience, which leads o unsus ainable economic
g ow h, especially i inequali y is de e mined by poli ical ac ions/ins i u ions o i i is a
consequence o he jus ice sys em. Howe e , income inequali y can also ha e posi i e e ec s,
especially i i is a esul o indi idual e o s and human engagemen in economic ac i i ies.
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The mo i a ion o ocusing on his heme consis s in he inc eased conce ns o EU
popula ion ega ding he dynamics o income inequali y, bu also in he need o explo e he ole o
ins i u ions in d i ing income inequali y le el, which is an impo an p oxy o social de elopmen .
Ins i u ions e lec he o mal and in o mal ules ha in luence he human ac ions in socie y (No h,
1989), and acco ding o Acemoglu and Robinson (2012), hese a e among he key ac o s
explaining he de elopmen gap be ween coun ies. In his case, i should be men ioned ha s a es
need a s ong ins i u ional in as uc u e o ensu e wel a e and economic g ow h (Acemoglu e al.,
2001; Rod ik, 2008; Acemoglu, 2012).
The gene al objec i e o his pape is o es ima e he e ec s o ins i u ions on income
inequali y, an objec i e ha will be achie ed h ough he ollowing speci ic objec i es: (i)
es ima ing he e ec s o ins i u ions ( ule o law / poli ical s abili y and absence o
iolence/ e o ism) on income inequali y; (ii) es ima ing he e ec s o o he income inequali y
explana o y ac o s (unemploymen , ea ly lea e s a e and housing cos o e bu den a e; (iii)
pe o ming he necessa y es s o alida e he accu acy o he es ima o s.
To achie e he men ioned objec i es, we ha e s uc u ed ou pape as ollows: (a) li e a u e
e iew, whe e we p esen he main li e a u e indings in his ield; (b) me hodology, whe e we
desc ibe he me hods used o ensu e he p ope achie emen o he pape s` objec i e; (c) esul s
and discussions, whe e we show and in e p e he ob ained esul s; (d) conclusion, whe e we d aw
he main conclusions.
Li e a u e e iew
A g owing body o li e a u e unde sco es he cen ali y o ins i u ions in shaping economic
ou comes. Ins i u ions, de ined as he o mal and in o mal ules ha go e n human in e ac ion
(No h, 1989) play a c i ical ole in media ing he dis ibu ion o economic esou ces and
oppo uni ies. Seminal wo ks by Acemoglu and Robinson (2012) a gue ha he quali y o hese
ins i u ions is a key de e minan o na ional p ospe i y, in luencing no only g ow h a es bu also
he equi able dis ibu ion o income. High-quali y ins i u ions, which ea u e e ec i e ule o law,
poli ical s abili y, and he absence o iolence o e o ism, a e hough o os e an en i onmen in
which esou ces a e alloca ed mo e ai ly and economic oppo uni ies a e b oadly dis ibu ed.
Income inequali y is one o he mos signi ican challenges ac oss he wo ld, causing economic
imbalances a he global le el. In his case, i should be no ed ha he income inequali y is di ec ly
ela ed o he ea ly lea e s and he po e y a e. The e o e, au ho s such as Glyn (1995), Helpman
e al. (2010), Maye (2010), Jianu (2018), Jianu (2020), Jianu e al. (2021), Fauzan e al. (2023),
Jianu e al. (2024) ha e con i med his ela ionship.
Low-income amilies ha e limi ed access o educa ion, especially high-quali y educa ion,
due o he high educa ion cos s ( o example, people li ing in u al a eas canno a o d o send hei
child en o s udy a high schools o uni e si ies in big ci ies due o he high cos s o
accommoda ion, educa ion ees, books), which discou ages young people om con inuing hei
s udies. As a consequence o low pa icipa ion in highe educa ion, young people will o en ace
di icul ies in accessing he labou ma ke , which inc eases unemploymen among he popula ion.
Mo eo e , housing is becoming inc easingly una o dable o middle-income and low-
income households (Anacke , 2019; Gals e and Lee, 2021; OECD, 2021, Lee e al., 2022), and
high housing cos s can be o e bu dening o low-income amilies.
Rega ding he impac o ins i u ions on income inequali y, Chong and Caldé on (2000)
indica es ha ins i u ions a e a key ac o ha imp o e he social inclusion, aking in o accoun ha
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high quali y ins i u ions educe he powe concen a ion and dis ibu e i mo e equally in o he
socie y, hus educing po e y and income inequali y. Ins i u ional indica o s such as go e nmen
s abili y, democ acy, accoun abili y, and bu eauc a ic quali y can a ec income dis ibu ion, which
inc ease he need o imp o ing he e iciency o go e nmen policies (Uza , 2021). In addi ion,
Jianu e al. (2019) ound ha income inequali y is mo e pe sis en , mo e eac i e o i s his o ical
e olu ions, and mo e di icul o be ackled in coun ies wi h ex ac i e ins i u ions. Income
inequali y, cha ac e ized by i s pe sis en na u e, dynamic esponse o his o ical legacies, and
heigh ened esilience in en i onmen s go e ned by ex ac i e ins i u ions, ep esen s a mul i ace ed
challenge. In socie ies whe e ins i u ional amewo ks a e designed o concen a e powe and
esou ces a he han dis ibu e hem equi ably, he dispa i ies in income no only endu e o e ime
bu also in ensi y in esponse o pas economic, poli ical, and social ajec o ies.
An impo an ins i u ional ac o ha should be conside ed is poli ical s abili y, gi en ha
i con ibu es o he inc ease in in es men s, which p o ides new oppo uni ies o socie y, bu i
also boos s he ci izen con idence. To his espec , se e al au ho s con i med he nega i e
ela ionship be ween poli ical s abili y and income inequali y (Alesina and Pe o i, 1996; Pe o i,
1996; Ta a es and Waczia g, 2001; Acemoglu e al., 2008; Aisen and Veiga, 2011). In addi ion,
Jannils (2024) used he panel echnique using 16 indica o s ha cap u e poli ical ins abili y in 133
coun ies, and demons a ed ha poli ical ins abili y con ibu ed signi ican ly o income inequali y
du ing he pe iod 1984-2019.
Wi h a iew o he ela ionship be ween income inequali y and he ule o law, se e al
esea che s (Viei a, 2007; Bhaga , 2020; Ba iola e al., 2022; Bozik, 2024) ha e ound a nega i e
associa ion. The e o e, s a es ha demons a e s onge adhe ence o he ule o law end o exhibi
lowe le els o income inequali y, a ai p edominan ly obse ed in s a es wi h a highe GDP pe
capi a.
To measu e he e ec o ule o law on income inequali y, Kpognon (2020) combined da a
om he Wo ld Bank's Doing Business index, he Wo ld Bank's global go e nance indica o s, he
economic eedom indices de eloped by he F ase Ins i u e and he He i age Founda ion, along
wi h he Gini coe icien , o build a panel composed o de eloped and de eloping coun ies, inding
an in e se ela ionship be ween ule o law and income inequali y. In addi ion, Bozik (2024)
demons a ed ha go e nmen cons ain s, he absence o co up ion, open go e nmen and
undamen al igh s a e associa ed wi h a low a e o income inequali y.
Me hodology
This sec ion p esen s he da a and me hodology used o assess he impac o ins i u ions on income
inequali y. To his end, we used Eu os a and Wo ld Bank da a o all EU Membe S a es, co e ing
he pe iod 2011-2022.
The es ima ion ha e been pe o med using Panel Es ima ed Gene alized Leas Squa es
me hod, his me hod being se in line wi h he esul s o he s a iona i y es s applied (1 - es s
co esponding o a common uni oo p ocess: Le in, Lin & Chu *, B ei ung -s a ; 2 - es s
co esponding o an indi idual uni oo p ocess: Im, Pesa an and Shin W-s a , ADF-Fishe Chi-
squa e, and PP-Fishe Chi-squa e). Taking in o accoun ha he numbe o obse a ions pe c oss-
sec ion (12) is lowe han he c oss-sec ions included in he assessmen (27) and o a oid
he e oskedas ici y we also applied Pe iod SUR op ion (when numbe o obse a ions pe c oss-
sec ion is highe han he numbe o c oss-sec ions, C oss-sec ion SUR should be applied) on he
ollowing Panel EGLS equa ion:
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𝑖𝑖𝑖𝑖𝑖𝑖_𝑞𝑞𝑞𝑞𝑖𝑖𝑖𝑖𝑞𝑞𝑖𝑖𝑞𝑞𝑞𝑞𝑖𝑖𝑖𝑖=𝛼𝛼0+𝛼𝛼1𝑞𝑞𝑒𝑒𝑒𝑒𝑞𝑞𝑒𝑒_𝑞𝑞𝑞𝑞𝑒𝑒𝑙𝑙𝑞𝑞𝑒𝑒𝑙𝑙𝑖𝑖𝑖𝑖+𝛼𝛼2𝑞𝑞𝑖𝑖𝑞𝑞𝑢𝑢𝑢𝑢𝑞𝑞𝑖𝑖𝑖𝑖+𝛼𝛼3𝑢𝑢𝑝𝑝𝑞𝑞_𝑙𝑙𝑞𝑞𝑒𝑒𝑠𝑠𝑖𝑖𝑖𝑖+
𝛼𝛼4ℎℎ_𝑖𝑖𝑝𝑝𝑙𝑙𝑞𝑞_𝑝𝑝𝑙𝑙𝑞𝑞𝑒𝑒𝑠𝑠𝑞𝑞𝑒𝑒𝑟𝑟𝑞𝑞𝑖𝑖𝑖𝑖𝑖𝑖+𝛼𝛼5𝑒𝑒𝑞𝑞𝑞𝑞𝑞𝑞_𝑝𝑝𝑜𝑜_𝑞𝑞𝑒𝑒𝑙𝑙𝑖𝑖𝑖𝑖+ 𝜀𝜀𝑖𝑖 (1)
whe e:
ep esen s he yea , i is he coun y name, 𝛼𝛼0, ..., 𝛼𝛼5 a e he coe icien s o he explana o y
a iables, 𝜀𝜀𝑖𝑖 is he e o e m, inc_quin ile e lec s he income quin ile sha e a io (S80/S20 - a
highe S80/S20 a io indica ing g ea e income inequali y because i shows ha he op ea ne s
con ol a much la ge p opo ion o he income compa ed o he bo om ea ne s; con e sely, a lowe
a io sugges s a mo e equi able income dis ibu ion), ea ly_lea e s ca ches he a e o people aged
be ween 18-24 yea s who d opped ou om educa ion and aining, unempl is he unemploymen
a e among he popula ion aged be ween 15-74 yea s, pol_s ab is he he index o poli ical s abili y
and absence o iolence / e o ism, hh_cos _o e bu den ep esen s he pe cen age o indi iduals
li ing in a household whe e housing cos s ep esen s a leas 40% o o al household cos and
ule_o _law is he ule o law index.
We ha e ob ained a balanced panel wi h a o al o 324 obse a ions including 12 pe iods
o ime (annually) anging om 2011 o 2022 wi hin he 27 coun ies o EU.
Fu he , we checked he e osimili y o he model by es ing he signi icance o he
coe icien s, he s a is ical alidi y o he model (Fishe es – a model is s a is ically alid i
p<0.05), he ex en o which he dependen a iable dynamic is explained by he e olu ion o he
explana o y a iables (R-squa ed), bu also o he impo an hypo heses such as: (i) no mal
dis ibu ion o he esiduals using Ja que-Be a es – no mal dis ibu ion is con i med i he Ja que-
Be a Null Hypo hesis is accep ed (p>0.05 and Skewness – Ku osis s a is ics a e close o 0 and 3
alues); (ii) au oco ela ion o he esiduals using Du bin-Wa son es – he DW s a should be
highe o equal wi h DU s a is ics, bu lowe han 4-DU o equal wi h i ; (iii) c oss-sec ional
dependence using B eusch-Pagan and Pesa an CD es s – p obabili ies should be highe han 0.05;
(i ) mul icollinea i y using Va iance In la ion Fac o s es – cen e ed VIF coe icien s should be
lowe han 4.
Resul s and discussions
In his sec ion, we p esen he main esul s ob ained ollowing he applica ion o he co esponding
me hodology. Fi s , we analyzed he income quin ile sha e a io be ween las Fi h quin ile and he
i s one (Figu e 1). The da a shows a high income inequali y le el in Romania, La ia, Li huania
and Bulga ia (whe e he pe cen age o he income ob ained by his g oup in he na ional income is
6 o 7 imes highe han he pe cen age co esponding o he i s quin ile), while he lowes le els
a e ound in Slo akia, Slo enia, Czech Republic and Belgium.
Nex , we p esen he main esul s o he econome ic me hods used. The esul s o he
s a iona i y es s applied (Table 1) indica e ha all a iables a e s a iona y a le el, which
ecommends applying a s anda d Leas Squa es eg ession. In his espec , we con inued by
applying he Panel EGLS me hod on he equa ion p esen ed in he me hodology.
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Figu e 1. Income inequali y in Eu opean Union (2022)
Sou ce: Own calcula ions using Mic oso O ice Excel, Eu os a da a.
Table 1. S a iona i y o he da a
S a iona i y (lag leng h
in o ma ion c i e ion)
Va iable
Numbe o es s con i ming
s a iona i y a I(0)
Schwa z / Akaike
inc_quin ile
7 o 12
ea ly_lea e s
8 o 12
unempl
8 o 12
pol_s ab
8 o 12
hh_cos _o e bu den
8 o 12
ule_o _law
7 o 12
Sou ce: Own calcula ions using E iews 12.0.
Acco ding o he esul s ob ained (Table 2), we ound ha an inc ease in he ea ly lea e s
a e by 1pp de e mined a hike in he income quin ile a io (S80/S20) by 0.058pp a EU le el in he
analyzed pe iod, while he impac o unemploymen on he dependen a iable is jus sligh ly lowe
(0.041pp).
Wi h a iew o he poli ical s abili y and absence o iolence / e o ism, we ound ha an
inc ease by 1 de ia ion poin in i s le el led o a d op o 0.011 in he income quin ile a io. To his
end, he esul s con i med an in e se ela ionship be ween poli ical s abili y / na ional sa e y and
income inequali y.
The esul s also indica e ha an inc ease o 1pp in he pe cen age o indi iduals li ing in a
household whe e housing cos s ep esen a leas 40% o o al household cos ha e led o a ise in
he income quin ile a io (S80/S20) by 0.019pp. Mo eo e , we ound a nega i e associa ion
be ween ule o law and income inequali y, an inc ease o 1 de ia ion poin in he ule o law index
leading o a all in he income quin ile a io by 0.024pp. This highligh s he signi ican ole o
impa ial and e ec i e jus ice sys ems in enhancing social de elopmen .
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
SK
SI
CZ
BE
FI
IE
PL
NL
HU
DK
AT
CY
SE
DE
LU
HR
FR
MT
PT
EL
EE
IT
ES
RO
LV
LT
BG
Income quin ile sha e a io (S80/S20) - 2022
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All coe icien s ob ained a e signi ican a 1% and he s anda d e o s co esponding o each
es ima ed impac a e qui e low, which inc eases he con idence in he es ima o s. In addi ion, he
model is alid om a s a is ical poin o iew (Fishe es p ob. < 0.05), while he R-squa ed alue
shows ha 45.99% o he income quin ile (S80/S20) e olu ion is explained by he de elopmen s
in he selec ed independen a iables, his indica ing a good choice o he explana o y ac o s, also
lea ing space o submi ing o he a iables ha could add alue o u u e esea ches.
Table 2. Resul s o he model
Va iable
Coe icien
S d. E o
-S a is ic
P ob.
EARLY_LEAVERS
0.058827 0.009058 6.434758 0.0000
UNEMPL
0.041732 0.007293 5.721892 0.0000
POL_STAB
-0.011531 0.002296 -5.021114 0.0000
HH_COST_OVERBURDEN
0.019850 0.006002 3.307375 0.0010
RULE_OF_LAW
-0.024436 0.004755 -5.138482 0.0000
C
6.458285 0.434523 14.86292 0.0000
Weigh ed s a is ics
R
-squa ed: 0.459997
Mean dependen a : 0.910428
Adjus ed R
-squa ed: 0.451506
S.D. dependen a : 3.346404
S.E. o eg ession: 0.976727
Sum squa ed esid: 303.3706
F
-s a is ics: 54.17711
D.W. s a :
1.995105
P ob(F
-s a is ic): 0.000000
Sou ce: Own calcula ions using E iews 12.0.
Rega ding he esiduals, he Ja que-Be a es (Figu e 2) indica es he esiduals a e no mally
dis ibu ed, since he JB p obabili y (16.93%) is highe han 5% and Skewness (0.25) - Ku osis
(3.01) alues a e close o 0 and 3. Mo eo e , he Du bin Wa son s a (1.995) con i med ha he
esiduals a e no au oco ela ed, while he esul s o he c oss-sec ion dependence es s (Table 3)
con i med he null hypo hesis, s a ing ha he e is no dependence be ween c oss-sec ions. In his
espec , i wo h o be men ioned ha all pe o med h ee es s (B eusch-Pagan LM, Pesa an scaled
LM and Pesa an CD) con i med he null hypo hesis (p>0.05).
Finally, we checked he mul icollinea i y by using Va iance In la ion Fac o s es , which
con i med i s absence, since all cen e ed VIF coe icien s a e lowe han 4. Taking in o
conside a ion all pe o med es s, we con i med ha he ob ained coe icien s a e no dis o ed, no
being a ec ed o mul icollinea i y o o he model issues.
DOI: 10.2478/picbe-2025-0071, pp. 907-915, ISSN 2558-9652 |
P oceedings o he 19 h In e na ional Con e ence on Business Excellence 2025
PICBE |
913
0
10
20
30
40
50
-2 -1 0 1 2 3
Se ies: S anda dized Residuals
Sample 2011 2022
Obse a ions 324
Mea n 0.061080
Median -0.018161
Maximum 2.853805
Minimum -2.475155
S d. De . 0.967205
Skewness 0.256379
Ku osis 3.012745
Ja que-Be a 3.551627
P obabili y 0.169346
Figu e 2. Dis ibu ion o he esiduals
Sou ce: Own calcula ions using E iews 12.0.
Table 3. Resul s o he c oss-sec ion dependence es s
C oss-sec ion dependence es s
P ob.
B eusch-Pagan LM
0.8117
Pesa an scaled LM
0.3742
Pesa an CD
0.1106
Sou ce: Own calcula ions using E iews 12.0.
Conclusion
Ou pape p o ides obus empi ical e idence ha ins i u ional quali y, pa icula ly measu ed by
indica o s o ule o law and poli ical s abili y (including he absence o iolence and e o ism),
exe s a signi ican mi iga ing in luence on income inequali y wi hin he Eu opean Union. The
nega i e ela ionship iden i ied in ou analysis unde sco es ha e ec i e ins i u ions no only
p omo e equi able esou ce dis ibu ion bu also con ibu e o a mo e esilien and inclusi e social
amewo k. Al hough he di ec quan i a i e impac o ins i u ional quali y may appea less
p onounced ela i e o o he socio-economic de e minan s, i s ole is mul i ace ed, in luencing and
in e ac ing wi h a ious aspec s o social de elopmen .
Speci ically, ou esul s indica e ha ad e se labo ma ke condi ions, as e idenced by
highe unemploymen a es and ele a ed ea ly school lea ing igu es, a e s ongly associa ed wi h
an inc ease in he income quin ile sha e a io (S80/S20). This inding ein o ces he c i ical
impo ance o good educa ion sys ems and ac i e labo ma ke policies in educing income
dispa i ies. Mo eo e , he obse ed posi i e co ela ion be ween he housing cos o e bu den a e
and income inequali y highligh s he g owing challenge o housing a o dabili y, a ac o ha
exace ba es inancial p essu es on lowe -income households and u he widens socio-economic
gaps.
While ou panel EGLS app oach deli e s s a is ically sound and policy- ele an insigh s
o he EU as a collec i e en i y, he s udy does bea ce ain limi a ions. The agg ega ion o da a a
he EU le el may no e eal signi ican in a- egional he e ogeni y, sugges ing ha coun y-
speci ic analyses could yield mo e nuanced indings. Fu u e esea ch could add ess his by applying
DOI: 10.2478/picbe-2025-0071, pp. 907-915, ISSN 2558-9652 |
P oceedings o he 19 h In e na ional Con e ence on Business Excellence 2025
PICBE |
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al e na i e econome ic amewo ks, such as he PMG/ARDL model, o allow o dynamic
adjus men p ocesses a he na ional le el, p o ided ha da a s a iona i y condi ions can be me .
In summa y, he indings o his pape no only alida e he heo e ical p oposi ion ha
high-quali y ins i u ions a e cen al o mi iga ing income inequali y bu also illumina e he
in e wined oles o educa ion, employmen , and housing in shaping equi able economic ou comes.
These insigh s p o ide a aluable ounda ion o policymake s, sugges ing ha e o s o imp o e
ins i u ional quali y should be in eg a ed wi h b oade socio-economic e o ms aimed a enhancing
social inclusion and sus ainable de elopmen .
This pape con i ms he nega i e ela ionship be ween ins i u ions ( ule o law and poli ical
s abili y and absence o iolence / e o ism) and income inequali y. E en i he di ec impac seems
o be lowe han he o he calcula ed e ec s, i should be aken in o accoun ha he quali y o
ins i u ions also in e ac s wi h o he o ms o de elopmen which in luences social indica o s. This
also highligh s he need o ully conside ins i u ional quali y challenges when d a ing go e nmen
measu es designa ed o ackle income inequali y.
We also ound a posi i e ela ionship be ween unemploymen / ea ly lea e s a e and
income quin ile a io (S80/S20), p o ing ha labou ma ke and educa ional sys ems emain key
ac o s explaining he income disc epancies. Finally, we con i med ha inc eased housing cos s
a e an impo an ac o exe cising p essu es on income inequali y. The limi s o ou s udy a e
ela ed o he ac ha he calcula ed coe icien s a e ele an o EU as a whole, no when e e ing
o indi idual Membe S a es. Applying a PMG/ARDL model in ou u he esea ch may add ess
his issue by allowing o in e p e he esul s a coun y le el. Howe e , he da a used in his
esea ch a e s a iona i y a le el and using a PMG/ARDL model was no a solu ion.
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