Chapter 15 - Changes in Expenditure and Income Inequality in the Czech and Slovak Republics, 1989 vs. 1992

Abstract

The study assesses the development of income and expenditure inequality within the main social groups of the Czech and Slovak Republics during first three years of the transition from a socialist to a market economy. The analysis is based on percentage change in four standard measures of inequality (Theil N, Theil T, Gini, and the coefficient of variation) calculated with adjusted and unadjusted household income and expenditure data from the Czech and Slovak Family Budget Surveys of 1989 and 1992. The results show that income and expenditure inequalities rose (with all four indicators) for blue and white collar workers in both republics and they narrowed for agricultural workers in both republics. On the other hand, the income and expenditure inequalities of pensioners rose in Slovakia and narrowed in the Czech Republic. A comparison of the inequality measures also shows there was little to no difference between the distributions of income (and expenditures) within households of the same social group across the two republics in 1989 and that the differences in 1992 remained the same, except that the distribution of income and expenditures of pensioners become more unequal in the Slovak Republic than in the Czech Republic.