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Earnings inequality and tax progressivity in Slovenia, 1991–2009

Author

Listed:
  • Tine Stanovnik

    (Faculty of Economics, University of Ljubljana & Institute for Economic Research, Kardeljeva plošcad 17, 1000 Ljubljana, Slovenia)

  • Miroslav Verbič

    (Faculty of Economics, University of Ljubljana, Slovenia
    Institute for Economic Research, Ljubljana, Slovenia)

Abstract

This paper analyses the distribution of employee earnings in Slovenia in the period 1991–2009. The analysis is based on large samples from the personal income tax (PIT) files. According to the Gini coefficient, increases in earnings inequality were moderate; however, relatively large increases in the shares accruing to the top 5% and top 1% of employees did occur. Inequality of employees’ after- tax earnings (i.e. net of employee social contributions and PIT) remained fairly stable in this time period, due to the increasing progressivity of PIT, as shown by the Kakwani index of progressivity. Increases in progressivity of the personal income tax came in leaps, following the introduction of new income tax legislation. Institutional settings and the introduction of minimum wage legislation in 1995 also appear to have moderated inequality increases, which were quite large in the early years of the transition.

Suggested Citation

  • Tine Stanovnik & Miroslav Verbič, 2013. "Earnings inequality and tax progressivity in Slovenia, 1991–2009," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 63(4), pages 405-421, December.
    • Handle: RePEc:aka:aoecon:v:63:y:2013:i:4:p:405-421
    Note: The authors are immensely grateful to Matej Divjak from the Statistical Office of the Republic of Slovenia, to Mojca Centa Debeljak and Branko Gorjan from the Tax Administration of the Republic of Slovenia, and to Stane Gros from the RRC Computer services.
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    Citations

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    Cited by:

    1. Tine Stanovnik & Miroslav Verbic, 2014. "Personal income tax reforms and tax progressivity in Slovenia, 1991-2012," Financial Theory and Practice, Institute of Public Finance, vol. 38(4), pages 441-463.
    2. Krajňák Michal, 2023. "Does the Type of Nominal Personal Income Tax Rate Affect Its Progressivity? A Case Study from the Czech Republic," Business Systems Research, Sciendo, vol. 14(1), pages 93-111, September.
    3. Andrej Srakar, 2017. "Prevalence of Diseases and Health Care Utilization ofthe Self-Employed Artists and TheirEmpirical Determinants: Evidence From a Slovenian Survey," ACEI Working Paper Series AWP-08-2017, Association for Cultural Economics International, revised Sep 2017.

    More about this item

    Keywords

    earnings inequality; tax progressivity; Slovenia;
    All these keywords.

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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