Income distribution in the Czech Republic, 1988-1996:: A market economy reborn

The author uses income surveys made by the Czech Statistical Office to document systemic changes in distribution and redistribution of household income and its determinants in the period 1988-1996. In the first section, Vecernik considers the growing difficulties of making accurate income surveys under the liberal regime; in the second, he discusses the meaning of various income indicators, and their relationship to the political regime and economic situation. Then using the variance analysis, he demonstrates a growing disparity in income after 1989, as well as a shift in the types of factors determining income. Demographic factors such as age or the number of active earners and children in a household, become less important, while socio-economic factors such as education and occupation become more important. The fourth part documents the increasing redistribution of income through taxes and social benefits. Vecernik concludes by comparing the Czech Republic with Western countries (using mostly the Luxembourg Income Study database).