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Militarization and Income inequality in European Countries (2000-2017)

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  • Raul Caruso

    (Department of Economic Policy and CSEA, Catholic University of Sacred Heart CESPIC, Catholic University “Our Lady of Good Counsel”)

  • Antonella Biscione

    (CESPIC, Catholic University “Our Lady of Good Counsel”)

Abstract

This paper investigates the impact of militarization on income inequality. The analysis is conducted on a panel of 40 European countries over the period 2000-2017. The degree of militarization of a country is captured by means of the Global Militarization Index (GMI) and we employ the Gini index as a measure of inequality. The main findings show that militarization and inequality are positively associated. The findings appear to be robust. We also consider control variables related to military commitment, namely (i) conscription; (ii) NATO membership; (iii) involvement in an armed conflict. Interestingly conscription appears to be negatively associated with income inequality whereas an armed conflict and NATO membership show the opposite sign. For sake of robustness, we undertake the same estimations on alternative samples of countries and results are confirmed. Eventually, to deal with the issue of endogeneity, we apply the Lewbel (2012) IV–GMM approach and results are confirmed.

Suggested Citation

  • Raul Caruso & Antonella Biscione, 2021. "Militarization and Income inequality in European Countries (2000-2017)," Working Papers 1015, European Centre of Peace Science, Integration and Cooperation (CESPIC), Catholic University 'Our Lady of Good Counsel'.
    • Handle: RePEc:pea:wpaper:1015
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    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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