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Rising Income Inequality

In: The Successes and Failures of Economic Transition

Author

Listed:
  • Hubert Gabrisch
  • Jens Hölscher

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.

Suggested Citation

  • Hubert Gabrisch & Jens Hölscher, 2006. "Rising Income Inequality," Palgrave Macmillan Books, in: The Successes and Failures of Economic Transition, chapter 7, pages 113-136, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-62658-4_8
    DOI: 10.1057/9780230626584_8
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