Evolution or Revolution? Disparities in Earnings and Household Income in the Czech Republic 1988-2002

Abstract

This paper draws on income surveys covering the period 1988-2002 to illustrate the changes in inequality of earnings and household incomes, the main factors behind their disparities, and the connections between these two distributions. The first part suggests a systemic change occurred, leading from the application of the "need principle" to the assertion of the "market principle". In the second part, the changing importance of individual factors of earnings in favour of education and occupation is demonstrated. In the third part, the intermediating factors between earnings and household are presented and income packaging is analyzed. More income is collected from the labour market and more of it is redistributed by the state. A systemic change occurred on one principal axis - the much greater role of education in the entire process.