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Inequality in Croatia in Comparison

Author

Listed:
  • Mario Holzner

    () (The Vienna Institute for International Economic Studies, wiiw)

  • Sebastian Leitner

    () (The Vienna Institute for International Economic Studies, wiiw)

Abstract

The paper analyses economic inequality in Croatia in comparison with other transition economies of Central, East and Southeast Europe. It comprises a literature review and a descriptive analysis as well as an econometric modelling exercise. The main findings are the following Over the entire transition period, Croatia has had a rather low and remarkably stable level of income inequality. The decomposition analysis of the period 2000-2006 shows that, although the concentration of income from paid employment was rising, overall stability of income inequality was due to a reduction of the more unequally distributed income from self-employment as well as to improved targeting of public transfers in later years. By contrast, the redistributive effect of the system of public pensions is rather low and could be improved. The outcome of the econometric analysis suggests that Croatia should further aim for a high share of government expenditures and a low level of inflation, in order to achieve a reasonable redistribution of disposable income and a stable development of real income. At the same time Croatia should increase its share of exports of goods and services in GDP to raise employment in the more productive export industries. Efforts to further decrease the relatively high unemployment rate would yield positive distributional effects as well.

Suggested Citation

  • Mario Holzner & Sebastian Leitner, 2009. "Inequality in Croatia in Comparison," wiiw Research Reports 355, The Vienna Institute for International Economic Studies, wiiw.
  • Handle: RePEc:wii:rpaper:rr:355
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    Cited by:

    1. Vojmir Franičević, 2011. "Croatia: Prolonged Crisis with an Uncertain Ending," Chapters,in: Work Inequalities in the Crisis, chapter 4 Edward Elgar Publishing.

    More about this item

    Keywords

    inequality; income distribution; transition economies; Croatia;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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