Income Gap between the New and Old EU Member States and Its Determinants in the Period 1996–2017
Income Gap between the New and Old EU Member States and Its Determinants in the Period 1996–2017

Summary/Abstract: In the period 1996–2017 there was a significant progress in reducing income disparities between the new member countries of the EU (EU-13) and the old EU member states (EU-15). The successes of individual new EU members in overcoming their income distance to Western Europe were diversified. It can be assumed that the catching-up process depends on the differentiated set of GDP per capita determinants. The main purpose of this paper is to verify this hypothesis. The examination confirms that the growth of GDP per capita in the countries that have diminished their income gap to the greatest extent (Lithuania, Latvia, Estonia, Poland, and Slovakia) was mainly shaped by their human capital resources, the degree of technological advancement of exports and quality of institutions, while the countries where divergence tendencies were observed (Cyprus, Malta) revealed much stronger influence of traditional growth factors (population growth, capital accumulation). The study uses econometric methods, especially cross-sectional and panel growth regression models.

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