Income distribution and economic cycle: Spain 2003-2011

This article analyzes the relationship between economic cycle and inequality in the Spanish regions in the period 2003-2011. The results indicate that inequality presents a clearly cyclical behavior: During the expansionary phase (2003-2007) the inequality and polarization decrease meanwhile during the recessionary phase (2008-2011) a clear increase of inequality has occurred. Also the increase of poverty has been observed. At a regional level, these regions with lower GDP per capita experience higher increases of inequality as a consequence of the crisis, so the welfare gaps between regions becomes larger.