GINI Country Report: Growing Inequalities and their Impacts in Bulgaria

Income inequality in Bulgaria during the last three decades has grown following periods of increase and decrease. During the 80s, the Gini coefficient decreased from 0.24 in 1980 to 0.2 in 1988. A considerable growth in inequality occurred in the initial years of the transition to a market economy (1990-1997). In this period, the Gini coefficient increased reaching 0.27 in 1997. A period of decrease followed (1998-2002) and later again a tangible increase (in 2010, Gini reached its highest level of 0.36). The evolution of income inequality is a direct result of economic development, reforms (mostly during the first half of the 90s) and income policy. The increase in inequality during the 90s was mostly owing to the development of the private sector in the economy, the continuous economic recession and the restrictive income policy that was applied. The continuous period of decline in income inequality could be explained mainly by the income policy implemented (a considerable increase in the minimal wage) and a gradual decrease in taxation on wages and social security payments.