Contrasting Theories and Evidence About Income Inequality of Post-socialist Central and Eastern European Countries in the European Union

Abstract

In this paper, the evolution of income inequality in five Central and Eastern European (CEE) post-socialist countries, members of the European Union (EU)—the Czech Republic, Hungary, Poland, Slovakia, and Slovenia—are examined. The similarities of political and economic changes in these countries allow an integrated analysis of their income inequality developments. Moreover, as these countries represent a unique group around the border between high-income and upper-middle-income countries, the paper can also contribute to the debate on inequality in countries at different levels of economic development. It focuses on several relating and often contradictory theories and empirical evidence from the past few years, trying to offer a comprehensive picture of the progress of inequality in this region. After a short introduction, the theories about the relationship between inequality and growth are summarized. Then, the empirical evidence about income inequality in CEE countries is presented and compared with EU-wide data. Finally, some concluding remarks close the paper.