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Economic transition and the distributions of income and wealth

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Author Info
Ferreira, Francisco H. G.

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Abstract

Using a model of wealth distribution dynamics and occupational choice, the author investigates the distributional consequences of policies and developments associated with the transition from central planning to a market system. The model suggests that even an efficient privatization designed to be egalitarian may lead to increases in inequality (and possibly poverty), both during the transition and in the new steady state. Creating new markets in services that are also supplied by the public sector may also contribute to an increase in inequality. So can labor market reforms that lead to a decompression of the earnings structure and to greater flexibility in employment. The results underline the importance of retaining government provision of basic public goods and services, removing barriers that prevent the participation of the poor in the new private sector, and ensuring that suitable safety nets are in place.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1808.

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Date of creation: 31 Aug 1997
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Handle: RePEc:wbk:wbrwps:1808

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Keywords: Environmental Economics&Policies Economic Theory&Research Banks&Banking Reform Fiscal&Monetary Policy Labor Policies Banks&Banking Reform Health Economics&Finance Economic Theory&Research Inequality Environmental Economics&Policies

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  1. Claudia Senik, 2002. "When Information Dominates Comparison. A Panel Data Analysis Using Russian Subjective Data," DELTA Working Papers 2002-02, DELTA (Ecole normale supérieure). [Downloadable!]
    Other versions:
  2. Milanovic, Branko & Ersado, Lire, 2008. "Reform and inequality during the transition: An analysis using panel household survey data, 1990-2005," MPRA Paper 7459, University Library of Munich, Germany. [Downloadable!]
  3. Xin Meng, 2007. "Wealth Accumulation and Distribution in Urban China," IZA Discussion Papers 2553, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Brando Jovanovic, 2000. "Russian Roulette- Expenditure Inequality and Instability in Russia, 1994-1998," William Davidson Institute Working Papers Series 358, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  5. Kenneth Smith, 2001. "Age/Earnings Profiles in Transition Economies: the Estonian Case," Post-Communist Economies, Taylor and Francis Journals, vol. 13(4), pages 485-503, December. [Downloadable!] (restricted)
  6. Sonin, Konstantin, 1999. "Inequality, Property Rights Protection, and Economic Growth in Transition Economies: Theory and Russian Evidence," CEPR Discussion Papers 2300, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  7. Adam McCarty, 2001. "The Social Impact of the Reform Process," Development and Comp Systems 0110004, EconWPA. [Downloadable!]
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