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Changing Inequalities and Societal Impacts in Rich CountriesThirty Countries' Experiences$
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Brian Nolan, Wiemer Salverda, Daniele Checchi, Ive Marx, Abigail McKnight, István György Tóth, and Herman G. van de Werfhorst

Print publication date: 2014

Print ISBN-13: 9780199687428

Published to Oxford Scholarship Online: April 2014

DOI: 10.1093/acprof:oso/9780199687428.001.0001

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Slovakia and the Czech Republic

Slovakia and the Czech Republic

Inequalities and Convergences After the Velvet Divorce*

Chapter:
(p.569) Chapter 24 Slovakia and the Czech Republic
Source:
Changing Inequalities and Societal Impacts in Rich Countries
Author(s):

Martin Kahanec

Martin Guzi

Monika Martišková

Zuzana Siebertová

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780199687428.003.0024

This chapter reviews the major developments, linkages, and factors that have resulted in converging or diverging patterns of inequality in the Czech Republic and Slovakia. It shows that they share a pattern of decreasing income inequality under the communist rule, followed by a relatively sharp increase in the 1990s, and steady income inequality in the 2000s. The pre-1989 patterns can be linked to extensive redistribution policies. Massive transformations involving price liberalization, introduction of hard budget constraints, privatization and liberalization of entrepreneurship, labour market reforms, and changes in the social security system explain the sharp increase. Whereas these patterns vindicate similarities between the two countries, historical legacies and differences in institutional and political developments have resulted in a number of divergent patterns after the Velvet Divorce, including a significantly higher unemployment rate in Slovakia, a different timing of reforms, or different distribution of inequalities across social groups in the two countries.

Keywords:   income inequality, drivers of inequality, education, Czech Republic, Slovakia, social impacts, poverty, liberalisation, social security reform, transition

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