From Needs to the Market: Changing Inequality of Household Income in the Czech Transition

Abstract

Statistical income surveys are used to document systemic changes in distribution and redistribution of household income and its determinants over the period 1988-1996. First, the growing difficulties facing income surveys under the democratic regime are considered. Secondly, the substantive meaning of various income indicators and their relation to the social and economic situation is discussed. Next, growing disparities in income after 1989 and the shift away from demographic factors (numbers of active earners and children, age) to socio-economic factors (education, branch, occupation) are displayed. The fourth part documents the increased redistribution of income achieved through taxes and social benefits. The fifth part compares the Czech case with Western countries in order to evaluate the extent to which income distribution has adjusted to the market economy. The conclusion offers a summary of main findings and discusses some additional resources of family welfare during the transition period.