We examine the effects of European Union (EU) membership on economic redistribution in Central and Eastern Europe. The region joined the EU after a decade and a half of far-reaching reforms that completely transformed its political and economic institutional framework. While accession provided new economic opportunities, it also imposed new constraints. Using cross-sectional time-series analysis of eleven post-communist countries between 2004 and 2019, our project takes stock of the multifaceted nature of European integration by exploring the impact of a variety of channels and causal mechanisms. We specifically focus on trade flows, cohesion funds, emigration, remittances, and EMU membership. We find that commercial reorientation toward the EU is associated with higher levels of redistribution in Central and Eastern Europe, which implies that CEE policymakers combined trade reorganization with compensation for the losers of globalization. Similarly, higher emigration and personal remittances are related to greater efforts to alleviate income inequality. In contrast, adoption of the euro generally induces lower redistribution. Interestingly, the receipt of EU cohesion funds does not have an effect on income differentials in the region. To our knowledge, this is one of the first systematic analyses of how the European Union shapes inequality dynamics in the young democracies of Central and Eastern Europe.
