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The author addresses the issue of interconnection between inequality and unemployment in modern developed economies. The research is centred around the socalled Transatlantic Consensus the inequalityunemployment tradeoff, which is frequently considered the major explanation for the differences in unemployment and inequality between rigidwage and flexiblewage economies, and by extension between Europe and the United States. The work assesses the existence and significance of such a tradeoff inside the European Union, providing a detailed research of unemployment and inequality trends in EU15 and Norway, and suggesting an empirical model for estimation of the tradeoff between unemployment and inequality in four groups of European countries (Scandinavian, Southern European, Continental and AngloSaxon countries).
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