chapter  III
26 Pages

The Distribution of per Capita Household Income in Hungary

WithHenryk Flakierski

To explain the variables that dynamically affect the distribution of per capita income in terms of the formula, it would be necessary to establish the contribution of each factor to changes in relative dispersion of per capita household income in quantitative terms. Some Hungarian economists firmly believe that wages have a weak stimulative effect in large households with unfavorable earner-dependent ratios. On the other hand, one questions whether wage incentives are in fact heavily reduced because of the composition of the household. Hungary began its economic reform after a long period during which the relative dispersion of per capita household income had been declining. It must be stressed, however, that the decline in overall inequality of per capita income dispersion was not the result of any levelling of wages and salaries but rather of a more rapid increase in the incomes of peasants than of other social groups, brought about by a deliberate state policy.