Income dynamics and stability in the transition process

Jens Hölscher, Raymond Bachan

Research output: Contribution to journalArticle

Abstract

Income distribution is a widely neglected subject in applied macroeconomics. This paper looks at the current state of art, which can be summarised as the “Transatlantic Consensus”explaining inequality through a partial analysis approach with changes on the labour market at its core. The potential interrelationship between inequality and growth is particularly important for transition countries, because according to common knowledge in this case the change of regime went along with rising inequality and declining income in the initial phase. The Czech case - the Czech Republic being the most egalitarian country among the former socialist economies - is even more interesting, because here income distribution remained relatively stable before and throughout the transition period. This result is illustrated by Lorenz curves. The analysis of so-far unpublished empirical data indicates that there is no need for active distribution policy in the Czech Republic. This result might not hold for other transition countries, which find themselves at the initial part of the Kuznets curve, but on a lower level of income
Original languageEnglish
Pages (from-to)421-442
Number of pages22
JournalActa Oeconomica
Volume52
Issue number4
DOIs
Publication statusPublished - Dec 2002

Keywords

  • education, Gini coefficient, education, income distribution, Czech Republic, Lorenz curves, Gini coefficient

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