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Income Distribution, Economic Systems and Transition

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  • John Flemming
  • John Micklewright

Abstract

The differences in income distribution between market and planned economies are considered in two ways. First, using benchmarks from the OECD area, evidence from the countries of Central and Eastern Europe and the former Soviet Union during the socialist period is reviewed. Second, the authors consider the transitions currently being made by the latter countries. Three factors are then considered: (i) the distribution of earnings of full-time employees, (ii) the distribution of individuals’ per capita household incomes, and (iii) the ways in which non-wage benefits from work, price subsidies and social incomes in kind change the picture. For the socialist period long series of data, often covering several decades, are available and thus changes in distribution under the socialist system can be tracked and diversity between the countries shown. For the period of transition, the series of data are inevitably shorter, however, it is possible to avoid basing conclusions on evidence drawn from single years. During transition, as under socialism, the picture is varied. Russia has experienced very sharp increases in measured inequality to well above the top of the OECD range. The Czech Republic, Hungary and Poland have seen more modest rises. However, a satisfactory analytic framework encompassing enough features of the transition to help interpretation of the data is lacking.

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Bibliographic Info

Paper provided by UNICEF Innocenti Research Centre in its series Innocenti Occasional Papers, Economic Policy Series with number iopeps99/69.

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Length: 100
Date of creation: 1999
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Handle: RePEc:ucf:iopeps:iopeps99/69

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Keywords: comparative analysis; economic transition; income distribution;

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References

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  17. Knight, J. & Lina, S., 1990. "The Determinants Of Urban Income Inequality In China," Economics Series Working Papers 9991, University of Oxford, Department of Economics.
  18. Andrew Newell & Mieczyslaw Socha, 1998. "Wages distribution in Poland: The roles of privatization and international trade, 1992-96," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 6(1), pages 47-65, 05.
  19. Garner, Thesia I & Terrell, Katherine, 1998. "A Gini Decomposition Analysis of Inequality in the Czech and Slovak Republics during the Transition," CEPR Discussion Papers 1897, C.E.P.R. Discussion Papers.
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  22. Jan Rutkowski, 1996. "High skills pay off: the changing wage structure during economic transition in Poland," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 4(1), pages 89-112, 05.
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