Reference : Inequality and Incentives: The Quasi-Natural Experiment of Hungary, 1914-2008
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Business & economic sciences : Economic systems & public economics
Inequality and Incentives: The Quasi-Natural Experiment of Hungary, 1914-2008
Mavridis, Dimitrios mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) >]
Mosberger, Palma mailto [Central European University and Hungarian National Bank]
[en] Inequality ; Skill Premium ; Socialism ; Transition Economies ; Great Depression
[en] We construct the first top income share series of a formerly socialist economy before, during, and after socialism in order to exploit the effect of the quasi-natural experiment of the absence of markets on incentives. We investigate top income shares dynamics and the sources of income at the upper tail of the income distribution. Within this setup, we study the effect of capital markets and liberalized wage settings on top income shares. Our estimates show that the introduction of wage-setting decentralization during socialism had a role in increasing the skill premium and income inequality in years prior the transition.
Researchers ; Professionals ; Students ; General public

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