Exploring the Moderation and Mediation Effects in Addressing the Main Determinants of Income Inequalities in Supporting Quality of Life: Insights from CEE Countries

Adriana AnaMaria Davidescu; Tamara Maria Nae; Margareta-Stela Florescu

doi:10.3390/ijerph19148555

Exploring the Moderation and Mediation Effects in Addressing the Main Determinants of Income Inequalities in Supporting Quality of Life: Insights from CEE Countries

Int J Environ Res Public Health. 2022 Jul 13;19(14):8555. doi: 10.3390/ijerph19148555.

Authors

Adriana AnaMaria Davidescu^{1

2}, Tamara Maria Nae^{3

4}, Margareta-Stela Florescu⁵

Affiliations

¹ Department of Statistics and Econometrics, The Bucharest University of Economic Studies, 010552 Bucharest, Romania.
² Department of Education, Training and Labour Market, National Scientific Research Institute for Labour and Social Protection, 010643 Bucharest, Romania.
³ Doctoral School of Economics, Bucharest University of Economic Studies, 010552 Bucharest, Romania.
⁴ Research and Analysis Department, Ministry of Finance, 050706 Bucharest, Romania.
⁵ Department of Administration and Public Management, Bucharest University of Economic Studies, 010374 Bucharest, Romania.

Abstract

Income inequality has become an increasingly pressing economic and social problem in Europe, especially in emerging countries with more significant inequalities than the EU average. The high-level inequality persistence can decrease well-being by accentuating the shortcomings at the household level, increasing poverty and social exclusion, generating political instability, leading to a decline in social cohesion, and, finally, a weakening of the Union as a whole. In this context, the paper aims to identify the main determinants of income inequality across the CEE countries and their significant implications in supporting the quality of life and well-being, highlighting the mediation and moderation effects. The analysis focuses on emerging European countries, using panel-based data analysis for ten EU countries covering 2008-2019. The empirical findings highlighted the importance of the minimum wage, high-tech exports, the degree of economic openness, the quality of institutions, and education spending in reducing income inequality. On the other hand, the proportion of the population with a higher education level and the interaction between official and unofficial economies led to income inequality. Therefore, to increase the quality of life, it is mandatory to decrease inequalities. Thus, fewer people will be at risk of living a less qualitative life. The empirical results also proved that the informal economy and the share of people employed in industry exhibited mediating roles. In contrast, the economic growth, the urbanization degree, and the share of people employed in services exhibited moderating roles. Additionally, we also tested the impact of the income inequality determinants of the quality of life, the empirical results supporting the influence of minimum wage, employment with tertiary education, government effectiveness, the degree of economic openness, and education expenditures.

Keywords: CEE countries; inequality determinants; mediation effect; moderation effect; panel data analysis; quality of life; well-being.

Publication types

Research Support, Non-U.S. Gov't

MeSH terms

Humans
Income*
Occupations
Poverty
Quality of Life*
Socioeconomic Factors

Grants and funding

The APC was funded by the project Development of institutional capacity for scientific research in Bucharest University of Economic Studies by increasing scientific visibility and sustainability, promoting open science practices” OPEN FUTURE, contract: CNFIS-FDI-2022-0472.