Wage and Income Inequality in Slovenia, 1993-2002
This paper analyses the dynamics of wage and income inequality in Slovenia from 1993 to 2002, using two different data sources. The first is obtained by extracting relevant information on wage earners from the personal income tax (PIT) database and the second is obtained using published data on wages and the wage distribution. Analyses of both datasets clearly show a large increase in wage inequality in the period 1993-1995. However, even after 1995 wage inequality has been creeping up. To a large degree, we ascribe the major increase in wage inequality to the rapid development of a full-fledged market economy and also to the changing PIT legislation. A growing individualization of wage contracts doubtlessly also contributed to increased inequality. In addition, our analysis touches upon the effects of the tax system and shows that the tax system significantly moderated the large increases in income inequality.
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