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Income Distribution and Convergence in the Transition Process – A Cross-Country Comparison

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  • Jens Hölscher

    (Brighton Business School, University of Brighton, Mithras House, Lewes Road, Brighton BN2 4AT, UK.)

Abstract

The aim of this study is to clarify, whether and where the widespread opinion that systemic change from socialism to capitalism went along with dramatically rising inequality is true and how income distribution does affect the overall growth performance of transition countries. The countries under review are: the Czech Republic, Hungary, Poland and Russia. The findings are analysed against the background of convergence or divergence respectively vis-à-vis the European Union (EU) level of income and income distribution. Here Germany, being the neighbouring country and biggest EU economy, is taken as benchmark. For the Czech Republic, Hungary and Poland it can be shown that income distribution remained relatively stable before and throughout the transition period on the basis of so far unpublished data from the Luxemburg Income Study database. Russia however displays a sharp increase in income distribution. These results are illustrated by Lorenz curves and underpinned by developments in functional income distribution and social transfers. An attempt is made to locate these transition countries on a stylised Kuznets curve and further qualitative factors referring to growth and equality are considered. Comparative Economic Studies (2006) 48, 302–325. doi:10.1057/palgrave.ces.8100119

Suggested Citation

  • Jens Hölscher, 2006. "Income Distribution and Convergence in the Transition Process – A Cross-Country Comparison," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 48(2), pages 302-325, June.
    • Handle: RePEc:pal:compes:v:48:y:2006:i:2:p:302-325
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    Cited by:

    1. Milanovic, Branko & Ersado, Lire, 2008. "Reform and Inequality during the Transition: An Analysis Using Panel Household Survey Data, 1990-2005," Policy Research Working Paper Series 4780, The World Bank.
    2. David Aristei & Cristiano Perugini, 2014. "Speed and Sequencing of Transition Reforms and Income Inequality: A Panel Data Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(3), pages 542-570, September.
    3. Jir Vecern k, 2010. "Earnings Disparities and Income Inequality in CEE Countries: An Analysis of Development and Relationships," LIS Working papers 540, LIS Cross-National Data Center in Luxembourg.
    4. Cristiano PERUGINI & Fabrizio POMPEI, 2009. "Technological change and income distribution in Europe," International Labour Review, International Labour Organization, vol. 148(1-2), pages 123-148, June.
    5. Alexei Izyumov & Trista Claxon, 2009. "Models of Capitalism and Income Distribution in Transition Economies: A Comparative Perspective," Journal of Economic Issues, Taylor & Francis Journals, vol. 43(3), pages 733-758.

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