The Rise in inequality following the transition from the centrally planned to market economy in the Central and Eastern European Countries : is it persistent?
The transition to the open market economy in the early 1990s caused major changes in the societies of the former centrally planned economies. Among the most visible ones there has been a significant increase of income inequalities, measured by the Gini coefficient. The aim of this paper is to present the evolution of the income inequalities in twelve Central and Eastern European Countries (CEECs), which are Belarus, Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russian Federation, Slovakia and Ukraine. The analysis covers the period from the early 1990s, which mark the transition point, to the years 2005-2007 depending on the data availability. The paper is divided into three sections. The first one examines changes in income inequality levels in the CEECs, including the possible reasons and differences among the countries under scrutiny as well as various measures of inequality. In the following section we discuss the persistence of this development. Further, we check, whether there is a discrepancy between the CEECs and UE15 income inequality developments over the last two decades and look for possible reasons of this situation. Our conclusions are presented in the final part of the paper. (original abstract)
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