income inequalities in hungary 1990-2010

8/2/2019 Income Inequalities in Hungary 1990-2010

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INCOME INEQUALITY IN HUNGARY,

1990-2010


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Long run evolution of inequality of per capita household income

Source: Tth, 2002, 2009. Data are from: 1962-1987: Hungarian Central Statistical Office Income Survey;1992, 1995, 1996: Hungarian Household Panel; 19992009: Trki Household Monitor.


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Increasing inequality of labour income

Shrinking share of labour income:

Employment decline (emp. rate from 76% (1990) to 58% (1996))

Increase in capital income: entrepreneurial income, privatisation

Austerity package 1995: freezing wages in public sector, means-

tested family allowance, rising retirement age, tuition in highereducation,

Steep increase in income inequalities 1987-1996 (1)


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Inequality of gross monthly earnings of full-time employees (men and women)

Note: Data are gross monthly earnings of full-time employees in May of each year. Data source: Enterprise survey (Survey ofIndividual Wages and Earnings). Before 1994, workers in private enterprises of less than 20 employees were not included. Since1994, the sample also covers enterprises with 10-20 employees. Data exclude enterprises with 5-9 employees. Data include 1/12 of

non-regular payments from previous yearSource: OECD Earnings Database

rising returns to

educationrising regional wagedifferences

But

lowering genderwage gap

less steep ageprofile

Steep increase in income inequalities 1987-1996 (1)


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Moderate decline in income inequality 2003-2007 (1)

Share of per capita personal income deciles from total HH disposable incomes

between 1962 and 2009

0,0

5,0

10,0

15,0

20,0

25,0

1962 1967 1972 1977 1982 1987 1992 1996 2000 2003 2005 2007 2009

S1S5

S1

Source: 1962Source: 1962Source: 1962Source: 19621987: KSH income surveys, Atkinson1987: KSH income surveys, Atkinson1987: KSH income surveys, Atkinson1987: KSH income surveys, AtkinsonMicklewright [1992] Table HI1.;Micklewright [1992] Table HI1.;Micklewright [1992] Table HI1.;Micklewright [1992] Table HI1.;

19921992199219921996: HHP waves I1996: HHP waves I1996: HHP waves I1996: HHP waves IVI., 2000VI., 2000VI., 2000VI., 20002009: Trki Household Monitor.2009: Trki Household Monitor.2009: Trki Household Monitor.2009: Trki Household Monitor.


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Moderate decline in income inequality 2003-2007 (2)

Social and economic policies influencing income distribution

Between 20022006:50% increase of public sector wagesIntroduction of 13th month pensionRedirecting family support to lower income groups (abolishing family taxallowances, raising family allowances)VAT reduction

After the summer of 2006: Increasing health care insurance contribution Increase of the upper rate of individual income tax Increase of the rate of EVA (standardized entrepreneur tax)

They drive to the same direction: first the lower-middle class get better,then the status of the upper-middle class get worse.


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85

90

95

100

105

110

115

lega

lacs

onya

bb(1) 2 3 4 5 6 7 8 9

2009/200

7,

%

vltozatlan szint

tlagos nvekeds (7%)

nvekeds relrtken (14%)Inflation (14%)

Average incomegrowth (7%)

No change level

Change in average incomes of various income deciles (person equivalent*income) between 2007 and 2009

* e=0.73

The crisis years, changes between 2007-2009 (1)


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Share of per capita personal income deciles from total HH disposable incomes

between 1962 and 2009

0,0

5,0

10,0

15,0

20,0

25,0

1962 1967 1972 1977 1982 1987 1992 1996 2000 2003 2005 2007 2009

S1

S5

S1

Source: 1962Source: 1962Source: 1962Source: 19621987: KSH income surveys, Atkinson1987: KSH income surveys, Atkinson1987: KSH income surveys, Atkinson1987: KSH income surveys, AtkinsonMicklewright [1992] Table HI1.;Micklewright [1992] Table HI1.;Micklewright [1992] Table HI1.;Micklewright [1992] Table HI1.;

19921992199219921996: HHP waves I1996: HHP waves I1996: HHP waves I1996: HHP waves IVI., 2000VI., 2000VI., 2000VI., 20002009: Trki Household Monitor.2009: Trki Household Monitor.2009: Trki Household Monitor.2009: Trki Household Monitor.



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No. of Persons living in households with different emplyoment compositionadults (estimate, 000 persons)

Hh head empl,no other empl.

Hh head empl,+ other empl.

Hh headinactive

headpensioner,no employed

headpensioner,+ employed



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Proportion of households repaying bank loans by income quintile


Source: Trki Household Monitor


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Percentage of households who have been in arrears of repaying debt during year 2009

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Lowest

quintile

2nd quintile 3rd quintile 4th quintile Richest

quintile

Total sample

Mortgages All bank loans Foreign currency denominated loans




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Percentage of households experiencing living difficulties

5 54

4

8

14

14

12

10

15

0

2

4

6

8

10

12

14

16

18

2001 2003 2005 2007 2009

Can't make ends meet Troubles paying for rent and utilities




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At-risk-of-poverty rate by age, 1992-2009 (%)

Source: TRKI.


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A summary of poverty analysis

socio-demographic profile

Significant increase: between 1992-1996 and 2007-2009

Consistent high risk group consistent low risk group

village Budapest

3+ children 0 child

inactive hh head second earner in the hh

max. primary educ. head at least secondary educ.Roma not roma

high risk, increased: households with at least 1 childand for the primary educated

low risk, decreased: head 60+,pensioner headed hh

income inequalities in hungary 1990-2010

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