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Income inequality, welfare, and poverty : an illustration using Ukranian data

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  • Kakwani, Nanak

Abstract

The Ukraine is now faced with economic crisis on an unprecedented scale. The government has to follow rigorous demand management policies, which entail lowering the population's standard of living. To design policies that protect the poorest and most vulnerable groups in the society, it is important to understand the nature of poverty and income inequality. The author addresses the following questions: What is the extent of income inequality and is it increasing? How can observed changes in inequality be explained? Is the burden of income tax evenly distributed across the population? The Ukranian data base is far from satisfactory, so the author's findings are only tentative. Among them: 1) the standard of living increased significantly in the late 1980s, then fell in the 1990s. Real per capita family income grew by an average of 7 percent in 1989-90, then fell about 24 percent in 1991-92. Per capita income for families dependent on government transfers fell by more than one-half. 2) Income inequality declined in the 1980s, to rise again in 1991-92. In particular, the family incomes of state and collective farm workers -- relative to industrial workers -- improved between 1980 and 1991. The increase in inequality that occurred in 1991-92 came about, among other reasons, because government benefits tended to be redistributed to richer families, not those in need. Poverty in Ukraine declined over the period 1980-91, from 38 percent of the population to 9 percent. But in 1992, 30 percent of the population was poor again, an alarming increase attributable both to a decline in real per capita income and an increase in income inequality. Still, income inequality was lower in Ukraine than in most other former republics of the Soviet Union.

Suggested Citation

  • Kakwani, Nanak, 1995. "Income inequality, welfare, and poverty : an illustration using Ukranian data," Policy Research Working Paper Series 1411, The World Bank.
  • Handle: RePEc:wbk:wbrwps:1411
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    References listed on IDEAS

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    Cited by:

    1. Maksim Yemelyanau, 2009. "Inequality in Belarus from 1995 to 2007," BEROC Working Paper Series 01, Belarusian Economic Research and Outreach Center (BEROC).
    2. Pundarik Mukhopadhaya, 2013. "Trends in income inequality in China: the effects of various sources of income," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 18(2), pages 304-317.
    3. Yitzhaki, Shlomo, 2002. "Do we need a separate poverty measurement?," European Journal of Political Economy, Elsevier, vol. 18(1), pages 61-85, March.
    4. Buckley, Robert M & Gurenko, Eugene N, 1997. "Housing and Income Distribution in Russia: Zhivago's Legacy," The World Bank Research Observer, World Bank, vol. 12(1), pages 19-32, February.
    5. Richard Bernknopf & Paul Amos, 2014. "Measuring earthquake risk concentration for hazard mitigation," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 74(3), pages 2163-2192, December.
    6. Markina Oksana, 2022. "Taxation, Inequality, and Poverty: Evidence from Ukraine," Central European Economic Journal, Sciendo, vol. 9(56), pages 1-18, January.
    7. Maksim Yemelyanau, 2008. "Inequality in Belarus from 1995 to 2005," CERGE-EI Working Papers wp356, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    8. Tomasz Panek, 2019. "Czy wzrost gospodarczy w Polsce w latach 2005 -2015 był korzystny dla ubogich?," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 2, pages 5-39.
    9. Kanbur, Ravi, 2000. "Income distribution and development," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 13, pages 791-841, Elsevier.
    10. repec:aia:aiaswp:wp94 is not listed on IDEAS
    11. Tomasz Panek, 2018. "Wzrost sprzyjaj¹cy ubogim: koncepcje i pomiar dla polski w latach 2005-2015," Working Papers 80, Institute of Statistics and Demography, Warsaw School of Economics.

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