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Wage and Income Inequality in Slovenia, 1993-2002

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  • Tine Stanovnik
  • Miroslav Verbic

Abstract

This article analyses the dynamics of wage and income inequality in Slovenia from 1993 to 2002, using two different data sources. The first is obtained by extracting relevant information on wage earners from the personal income tax (PIT) database and the second is obtained using published data on wages and the wage distribution. Analyses of both datasets clearly show a large increase in wage inequality in 1993-95. However, even after 1995 wage inequality has been creeping up. To a large degree, we ascribe the major increase in wage inequality to the rapid development of a full-fledged market economy and also to the changing PIT legislation. A growing individualisation of wage contracts doubtless also contributed to increased inequality. In addition, our analysis touches upon the effects of the tax system and shows that it significantly moderated the large increases in income inequality.

Suggested Citation

  • Tine Stanovnik & Miroslav Verbic, 2005. "Wage and Income Inequality in Slovenia, 1993-2002," Post-Communist Economies, Taylor & Francis Journals, vol. 17(3), pages 381-397.
    • Handle: RePEc:taf:pocoec:v:17:y:2005:i:3:p:381-397
    DOI: 10.1080/14631370500204412
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    1. Stanovnik, Tine, 1997. "The returns to education in Slovenia," Economics of Education Review, Elsevier, vol. 16(4), pages 443-449, October.
    2. A. B. Atkinson, 2003. "Income Inequality in OECD Countries: Data and Explanations," CESifo Economic Studies, CESifo Group, vol. 49(4), pages 479-513.
    3. Neven Borak & Lovrenc Pfajfar, 2002. "Inequalities in Income Distribution in Slovenia," Post-Communist Economies, Taylor & Francis Journals, vol. 14(4), pages 455-468.
    4. Koen Caminada & Kees Goudswaard, 2001. "International Trends in Income Inequality and Social Policy," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(4), pages 395-415, August.
    5. Branko Milanovic, 1999. "Explaining the increase in inequality during transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(2), pages 299-341, July.
    6. A. B. Atkinson, 1998. "The distribution of income in industrialized countries," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 11-32.
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    Cited by:

    1. Tine Stanovnik & Miroslav Verbic, 2014. "Personal income tax reforms and tax progressivity in Slovenia, 1991-2012," Financial Theory and Practice, Institute of Public Finance, vol. 38(4), pages 441-463.
    2. Cho, Sang-Wook (Stanley) & Díaz, Julián P., 2013. "Trade integration and the skill premium: Evidence from a transition economy," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 601-620.

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    More about this item

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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