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Income Distribution, Economic Systems and Transition

  • John Flemming
  • John Micklewright

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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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
Date of revision:
Handle: RePEc:ucf:iopeps:iopeps99/69
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  1. Knight, J. & Lina, S., 1990. "The Determinants Of Urban Income Inequality In China," Economics Series Working Papers 9991, University of Oxford, Department of Economics.
  2. Peter Galasi, 1998. "Income Inequality and Mobility in Hungary 1992-96," Innocenti Occasional Papers, Economic Policy Series iopeps98/3, UNICEF Innocenti Research Centre.
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  4. Dewatripont, M & Roland, G, 1992. "Economic Reform and Dynamic Political Constraints," Review of Economic Studies, Wiley Blackwell, vol. 59(4), pages 703-30, October.
  5. Newell, Andrew & Reilly, Barry, 1996. "The gender wage gap in Russia: Some empirical evidence," Labour Economics, Elsevier, vol. 3(3), pages 337-356, October.
  6. Simon Commander & Mark Schankerman, 1997. "Enterprise restructuring and social benefits," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 5(1), pages 1-24, 05.
  7. repec:cup:cbooks:9780521584036 is not listed on IDEAS
  8. 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.
  9. Mathias Dewatripont & Gérard Roland, 1996. "Transition as a process of large-scale institutional change," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 4(1), pages 1-30, 05.
  10. 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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  12. Paul Gregg, 1996. "It Takes Two: Employment Polarisation in the OECD," CEP Discussion Papers dp0304, Centre for Economic Performance, LSE.
  13. Doyle, Chris, 1996. "The Distributional Consequences during the Early Stages of Russia's Transition," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 42(4), pages 493-505, December.
  14. Robert M. Buckley & Eugene N. Gurenko, 1998. "Housing demand in Russia: Rationing and reform," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 6(1), pages 197-209, 05.
  15. Marguerite Perrot & Françoise Bourit & Patrice Hernu, 1983. "Les salaires en 1982," Économie et Statistique, Programme National Persée, vol. 154(1), pages 17-32.
  16. Simon Commander & Andrei Tolstopiantenko & Ruslan Yemtsov, 1997. "Channels of Redistribution: Inequality and Poverty in the Russian Transition," William Davidson Institute Working Papers Series 42, William Davidson Institute at the University of Michigan.
  17. Pudney, Stephen, 1994. " Earnings Inequality in Hungary: A Comparative Analysis of Household and Enterprise Survey Data," Economic Change and Restructuring, Springer, vol. 27(3), pages 251-76.
  18. Alexeev, Michael, 1988. "The effect of housing allocation on social inequality: A soviet perspective," Journal of Comparative Economics, Elsevier, vol. 12(2), pages 228-234, June.
  19. 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.
  20. Jiri Vecerník, 1995. "Changing earnings distribution in the Czech republic: survey evidence from 1988-1994," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 3(3), pages 355-371, 09.
  21. Bergson, Abram, 1984. "Income Inequality under Soviet Socialism," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1052-99, September.
  22. Stephen Pudney, 1994. "Earnings inequality in Hungary since 1988 1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 2(1), pages 101-106, 03.
  23. Stephen Pudney, 1995. "Income distribution and the reform of public housing in Hungary," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 3(1), pages 75-106, 03.
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