Analysis of income inequalityof Czech house-holds

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JEL classification

• Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
• Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes

Keywords

Gini coefficient, incomes, inequality, tax, transfer payments

Abstract

The paper focuses on an analysis of income inequality of population in the Czech Republic on the basis of data from the Statistics on Income and Living Conditions, for the period of 2005–2009. The partial goals of the paper include evaluation of the development of primary income inequality in the Czech Republic, evaluation of the effects of income components and also tax-transfer tool on the income inequality. The basic methodological tool is the Gini coefficient and its decomposition according to individual categories of incomes. The analysis identified a decreasing tendency of income inequality. The main determinant affecting income inequality may be considered income from entrepreneurship. Tax-transfer tolls effectively eliminate mentioned inequality and the social incomes have the strongest redistribution effect. The establishment of equal tax in the year 2008 does not cause increase in income inequality.