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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- Roland Benabou, 1996.
NBER Working Papers
5583, National Bureau of Economic Research, Inc.
- Simon Commander & Andrei Tolstopiatenko & Ruslan Yemtsov, 1999.
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The Economics of Transition,
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"Economic Transformation in Eastern Europe and the Distribution of Income,"
Cambridge University Press, number 9780521438827, October.
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- Galor, Oded & Zeira, Joseph, 1988.
"Income Distribution and Macroeconomics,"
51644, University Library of Munich, Germany, revised 01 Sep 1989.
- Francisco H.G. Ferreira & Julie Litchfield, 1998.
"Education or Inflation? The Roles of Structural Factors and Macroeconomic Instability in Explaining Brazilian Inequality in the 1980s,"
STICERD - Distributional Analysis Research Programme Papers
41, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Francisco H. G. Ferreira & Julie A. Litchfield, 1998. "Education or inflation? The roles of structural factors and macroeconomic instability in explaining Brazilian inequality in the 1980s," LSE Research Online Documents on Economics 6586, London School of Economics and Political Science, LSE Library.
- Thesia I. Garner & Katherine Terrell, 1997. "Changes in Distribution and Welfare in Transition Economies: Market vs. Policy in the Czech Republic and Slovakia," William Davidson Institute Working Papers Series 77, William Davidson Institute at the University of Michigan.
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