INEQUALITY IN THE HOUSEHOLD INCOME DISTRIBUTION IN UKRAINE

Abstract

Currently Ukrainian economy is characterized by an unstable situation caused by the political and economic situation in the country, as well as a by the pandemic, which led to irregularity in the population income distribution, which further affected consumption and its volume. The article examines irregularity in the distribution of household’s incomes. The research analysis reveals that there have been positive changes in the structure of cumulative income of urban and rural households in Ukraine recently. To put it more precisely, there is an increase in the share of wages, transfer payments in the form of benefits and subsidies and income from business activities along with the specific natural incomes and pensions decrease. However, factual statistical information contradicts the realities of our lives. Their structure in 2020 was analyzed and the share of wages in the household incomes formation is calculated. Indicators of socio–economic irregularity (Lorentz curve, Gini coefficient, decile coefficient) were studied. Compared to the developed world countries, the general level of Ukrainians’ income remains low. The main part of Ukrainian citizens’ income is spent on consumption since they have no opportunity to save. Recently, there has been a decrease in the book income from hired labor, and, therefore, most households conceal their income, which affects living standards and reduces revenues to the state budget. The dynamics of income and expenditure of urban and rural households in 2020 was also analyzed. It was found out that the vast majority of urban and rural households in the country spend their income on consumption and they have no ability to save. The main ways to reduce income inequality are indicated, namely: ending the war in the east of the country; increasing the tax burden for big business and the wealthiest sections of the population; deprivation of the oligarchs’ influence on the government, increase in wages; reducing unemployment; employment growth; reducing the level of corruption; development of small and medium business, creating equal opportunities for all sections of the population in education and health care.