Skip to main content

Rising Income Inequality

  • Chapter
  • 112 Accesses

Abstract

A relatively even distribution of income was one of the classic attributes of the socialist system. This changed dramatically during the period of transformation but stabilized in CEE to almost continental European levels. Not so in Russia, where inequality levels remained significant. Chapter 7 is structured as follows. We first summarize the standard explanation for rising inequality, which is a microeconomic approach in a partial analytical framework. Its application to transition economies is briefly presented. We then reflect on the macroeconomic issues related to the distribution of income: various approaches are discussed in this context. We then present an empirical analysis of the Czech Republic, Hungary, Poland, and Russia, organized in a sequence of general income development, personal income distribution, and functional income distribution plus transfers. The following section reconsiders the performance of each country, and gives hypothetical explanations. The conclusion reviews the countries into the context of convergence and divergence.

Keywords

  • Income Inequality
  • Income Distribution
  • Gini Coefficient
  • Economic Transition
  • Lorenz Curve

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

This is a preview of subscription content, access via your institution.

Buying options

Chapter
USD   29.95
Price excludes VAT (USA)
  • DOI: 10.1057/9780230626584_8
  • Chapter length: 24 pages
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
eBook
USD   99.00
Price excludes VAT (USA)
  • ISBN: 978-0-230-62658-4
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
Softcover Book
USD   135.00
Price excludes VAT (USA)
Hardcover Book
USD   140.00
Price excludes VAT (USA)

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References and further reading

  • Aghion, P. and S. Commander (1999) ‘On the dynamics of inequality in the transition’, Economics of Transition 7(2).

    Google Scholar 

  • Atkinson, A. B. (1999) ‘Is rising inequality inevitable? A critique of the “Transatlantic Consensus”’, The United Nations University, WIDER Annual Lectures 3, Helsinki.

    Google Scholar 

  • Atkinson, A. B. (2000) ‘The changing distribution of income: evidence and explanations’, German Economic Review 1(1).

    Google Scholar 

  • Barro, R. J. (2000) ‘Inequality and growth in a panel of countries’: available at www.economics.harvard.edu/faculty/barro/barro.html.

    Google Scholar 

  • Campos, N. and F. Coricelli (2002) ‘Growth in transition: what we know, what we don’t, and what we should’, Journal of Economic Literature 40, 793–836.

    CrossRef  Google Scholar 

  • Dollar, D. and A. Kraay (2000) ‘Growth is good for the poor’ (Washington, DC: World Bank); available at, www.worldbank.org/research.

    Google Scholar 

  • Gottschalk, P. and T. M. Smeeding (1997) ‘Cross-national comparisons of earnings and income inequality’, Journal of Economic Literature 35, 633–87.

    Google Scholar 

  • Gradstein, M. and B. Milanović (2002) ‘Does liberte = égalité?’, Policy Research Working Paper 2875 (Washington, DC: World Bank).

    Google Scholar 

  • Greenwood, J. and B. Jovanovic (1999) ‘Financial development, growth, and the distribution of income’, Journal of Political Economy 98(5).

    Google Scholar 

  • Hölscher J. (2006) ‘Income distribution and convergence in the transition process — a cross country comparison’, Comparative Economic Studies, 48(2), 302–25.

    CrossRef  Google Scholar 

  • Hölscher, J. (2000a) ‘Income dynamics and stability in the transition process — general reflections applied to the Czech Republic’, Center for European Integration Studies, University of Bonn, ZEI Working Paper B19/2000; available at www.zei.de.

    Google Scholar 

  • Hölscher, J. (ed.) (2000b) ‘Financial Turbulence and Capital Markets in Transition Countries (London and New York: Macmillan and St Martin’s Press).

    Google Scholar 

  • Honkkila, J. (2000) ‘Inequality, restructuring and growth in transitional economies’, Paper presented at the School of Slavonic and East European Studies, University College London.

    Google Scholar 

  • Keane, M. P. and E. S. Prasad (2000) ‘Inequality, transfers and growth: new evidence from the economic transition in Poland’, IMF (International Monetary Fund) Working Papers.

    Google Scholar 

  • Krelle, W. (1962) Verteilungstheorie (Wiesbaden: Gabler).

    CrossRef  Google Scholar 

  • Kuznets, S. (1955) ‘Economic growth and income inequality’, American Economic Review, 45(1).

    Google Scholar 

  • Luxemburg Income Study (LIS) Databank.

    Google Scholar 

  • Milanović, B. (1998) ‘Income, inequality and poverty during the transition from planned to market economy’ (Washington, DC: World Bank).

    Google Scholar 

  • Milanović, B. (2000) ‘Explaining the increase in inequality during the transition’; available at www.worldbank.org/research/transition/pdf/employ2.pdf.

    Google Scholar 

  • Roland, G. (2001) ‘Ten years after … transition and economics’, IMF Staff Papers 48, 29–52.

    Google Scholar 

  • Roland, G. (2002) The political economy of transition, Journal of Economic Perspectives 16(1), 29–50.

    CrossRef  Google Scholar 

  • Schneider, F. and D. H. Enste (2000) ‘Shadow economies: size, causes, and consequences’, Journal of Economic Literature 38, 77–114.

    CrossRef  Google Scholar 

  • Sigmund, P. (1998) ‘Zur Lohn- und Einkommensentwicklung in Russland’, Institut für Wirtschaftsforschung Halle, Forschungsreihe 5/1998.

    Google Scholar 

  • Vecernik, J. (1999) ‘Communist and transitory income distribution and social structure in the Czech Republic’, The United Nation University, WIDER, Research for Action 51, Working Paper, Helsinki.

    Google Scholar 

  • Vecernik, J. (2000) ‘Distribution of household income in the Czech Republic 1988–1996: readjustment to the market’, mimeo.

    Google Scholar 

  • Vecernik, J. and P. Mateju (eds) (1999) Ten Years of Rebuilding Capitalism: Czech Society after 1989 (Prague: Academia).

    Google Scholar 

  • Yigit, T. M. and A. M. Kutan (2004) ‘European integration, productivity growth and real convergence’, Center for European Integration Studies, University of Bonn, ZEI Working Paper B08/2004; available at www.zei.de.

    Google Scholar 

Download references

Authors

Copyright information

© 2006 Hubert Gabrisch and Jens Hölscher

About this chapter

Cite this chapter

Gabrisch, H., Hölscher, J. (2006). Rising Income Inequality. In: The Successes and Failures of Economic Transition. Palgrave Macmillan, London. https://doi.org/10.1057/9780230626584_8

Download citation