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Sources of Income Inequality: Empirical Evidence from Bulgaria

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Name of the Asset | Sources of Income Inequality: Empirical Evidence from Bulgaria
Type of Asset | Working Paper
Date | December 2011


Bulgaria was affected by various adverse economic and demographic processes, which were particularly severe during the first half of the 1990s. This paper analyzes the extent to which socio-demographic characteristics of the household – such as ethnicity, type of settlement, household size, number of unemployed, number of children, number of pensioners, etc. – could be considered as sources of income inequality. It utilizes data from a representative survey of 3,300 Bulgarian households, conducted in 2007, for a quantile regression analysis.

The study reveals positive net effects of the degree of urbanization and the number of employed in the household, as well as negative effects of the number of unemployed, children, and pensioners on the per-capita income level at all parts of the income distribution. Inequality indices decomposition by subgroups identifies the type of settlement, ethnical group, the number of children and unemployed as substantial sources of income inequality. The findings provide an orientation toward those Bulgarian households' characteristics that could be targeted by the public policy instruments for poverty alleviation.

Authors :

  • Venelin Boshnakov, University of National and World Economy, and Centre for Comparative Studies, Sofia
  • Vesselin Mintchev, Economic Research Institute at Bulgarian Academy of Sciences, and Centre for Comparative Studies, Sofia
  • Alexander Naydenov, University of National and World Economy

Country and/or Region | Bulgaria
Name of the Program | Regional Research Competition
Funder(s) |  Jubiläumsfonds of the Austrian National Bank (OeNB) and the Austrian Ministry of Finance

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