Income Inequality Before, During, and After the Transition in Central and Eastern Europe

Abstract

Abstract This chapter explores the income inequality in Central and Eastern Europe before, during, and after the transition. It argues that the fall of communism and the transition to a market economy in Eastern Europe were landmark events in the history of modern inequality. Inequality dramatically increased in Eastern Europe after communism. The notion of inequality development of post-socialist countries allows for a greater understanding of the role of technological change and globalization against changing institutions and transition policies. The chapter then discusses the long-run trends of inequality in post-socialist countries and the recentered influence function (RIF) decomposition method in line with the role of changes in individual characteristics and its returns in shaping income distribution.