Income Inequalities in the Former Soviet Union and Its Republics by Flakierski Henryk;

Author:Flakierski, Henryk;
Language: eng
Format: epub
Publisher: Taylor & Francis Group

III. Distribution of Per Capita Household Income

1. Inequality of Per Capita Household Income in the USSR as a Whole

Up to this point we have dealt with different aspects of wages and wage differentials in the Soviet Union. Although wages are one of the indicators of differences in the standard of living, per capita household income reflects better the level of welfare of the population. This is so because the latter category incorporates not only wages but also the social benefits in cash and in addition reflects the influence of the demographic structure of the household on income per capita (the ratio of active earners in the household to the total number of members of the household and the ratio of dependents to wage earners).

By and large, per capita household income depends on: (a) average earnings per active member of the household (W/L) (where W refers to wages and salaries of the household and L is the number of active earners); (b) the activity rate of the household (L/N)51 (where N is the number of persons in the household); and (c) the proportion of total income to wages and salaries combined (Y/W), or the influence of social benefits in cash.

The relative dispersion of per capita household income depends on: (a) the relative dispersion of earnings per active household member; (b) the relative dispersion of household activity rates (the ratio of employed members to the size of the household); (c) the relative dispersion of the ratio Y/W.

To explain the variables that dynamically affect the distribution of per capita income, it is necessary to establish the contribution of each factor to changes in relative dispersion of per capita household income in quantitative terms. Unfortunately, we do not have statistical data for such a computation, especially data about the relative dispersion of social benefits in cash over time. We can, however, use these elements as a framework for a priori reasoning.

Table 11

Distribution of Per Capita Household Income in the USSR (measures of dispersion)

We were able to compute measures of dispersion for per capita household income for the period 1980–89. The findings in Table 11 are as follows.

1. In the period 1980–89 there is a very strongly pronounced increase in relative dispersion of per capita household income when we compare the extremes of the distribution scale (P99:P1, P98:P2). For most of the distribution, measured by the decile ratio (P90:P10), no changes can be observed. What is more, all changes in relative dispersion took place only between 1980 and 1985; after that period, no changes are observed by any measure of inequality.52

It is worth commenting here on the causes of the moderate increase in relative dispersion in per capita household income in the period 1980–89. To answer this question we must analyze the changes in the three variables that affect per capita income: (a) relative dispersion of wages; (b) Relative dispersion of household activity rates, and (c) relative dispersion of social benefits in cash.

As we can see by comparing the data of Table 6 with Table

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.