Growth and Inequality: Evidence from Transitional Economies
AbstractThe transitional economies of Eastern Europe (EE) and the former Soviet Union (FSU) experienced a dramatic increase in income inequality in the 1990s. In this paper I investigate the causes of unprecedented changes in income distribution using a unique panel of inequality estimates for 24 transitional countries for the period 1989-1998. The fixed effects model is used to control for unobservable country-specific effects that result in a missing-variable bias in cross-sectional studies. The relationship between income inequality, measured by Gini coefficient, and per capita GDP is shown to be positive for EE, but negative for the FSU. Economic liberalization, privatization and deindustrialization are found to have contributed to the rise in income inequality in the transitional region. Hyperinflation also makes the distribution of income more unequal. I do not find strong support for unemployment and the size of government consumption affecting income distribution. While civil conflicts increase income inequality, the extent of political rights and civil liberties is not found to directly affect income distribution.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 746.
Date of creation: 2002
Date of revision:
economic growth; income distribution; transitional economies; panel data;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Thurow, Lester C, 1970. "Analyzing the American Income Distribution," American Economic Review, American Economic Association, vol. 60(2), pages 261-69, May.
- Abdur R Chowdhury, 2004.
"Private Savings in Transition Economies: Are there Terms of Trade Shocks?,"
Comparative Economic Studies,
Palgrave Macmillan, vol. 46(4), pages 487-514, December.
- Abdur R. Chowdhury, 2003. "Private Savings In Transition Economies: Are There Terms Of Trade Shocks?," William Davidson Institute Working Papers Series 2003-572, William Davidson Institute at the University of Michigan.
- Facundo Alvaredo & Leonardo Gasparini, 2013. "Recent Trends in Inequality and Poverty in Developing Countries," CEDLAS, Working Papers, CEDLAS, Universidad Nacional de La Plata 0151, CEDLAS, Universidad Nacional de La Plata.
- Jeffrey B. Miller & Stoyan Tenev, 2005. "State and Ownership Reforms in Transition Economics: China vs. the Orthodoxy," Working Papers 05-10, University of Delaware, Department of Economics.
- Chowdhury, Abdur R., 2003. "Do asymmetric terms of trade shocks affect private savings in a transition economy?," BOFIT Discussion Papers 3/2003, Bank of Finland, Institute for Economies in Transition.
- Aristei, David & Perugini, Cristiano, 2012. "Inequality and reforms in transition countries," Economic Systems, Elsevier, vol. 36(1), pages 2-10.
- Milanovic, Branko, 2003. "Is inequality in Africa really different ?," Policy Research Working Paper Series 3169, The World Bank.
- Abdur R. Chowdhury, 2003. "Do asymmetric terms of trade shocks affect private savings in a transition economy?," Macroeconomics, EconWPA 0303006, EconWPA.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.