Income inequality in post-communist Central and Eastern European countries

Abstract:

Income inequality has become an important issue in Central and Eastern European countries during their transition process. This study constructs a model incorporating different categories of factors that impact inequality and tests whether the wealth of a country makes a difference in these relationships.

This article shows that different income categories of Central and Eastern European transition countries do experience different relationships between income inequality and its contributing factors: economic, demographic, political, and cultural and environmental.

The resulting Random Effects models of the best fit incorporate economic and political factors and show differences in magnitude, direction, and in their significance. These findings add to the literature by taking a cross-country and cross-income view on the impact of various factors.