Economic transition and the distributions of income and wealth
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.
|Date of creation:||31 Aug 1997|
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- Benabou, R., 1996.
96-17, C.V. Starr Center for Applied Economics, New York University.
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STICERD - Distributional Analysis Research Programme Papers
41, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
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- Simon Commander & Andrei Tolstopiatenko & Ruslan Yemtsov, 1999.
"Channels of redistribution: Inequality and poverty in the Russian transition,"
The Economics of Transition,
The European Bank for Reconstruction and Development, vol. 7(2), pages 411-447, July.
- 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.
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