Income Inequality in Eastern Europe: Bulgaria and Czechoslovakia in the Twentieth Century

We find that the different inequality levels in Czechoslovakia and Bulgaria in the first half of the 20th century were the result of a more “developed” social structure in the former. [...] The aftermath of the First World War brought the dissolution of the Habsburg Empire and the establishment of the First Czechoslovak Republic. [...] Recorded inequality patterns may be thus indicative of 9 Share of industry (%) the assumed evolution and mechanisms operating during different phases of development − i.e., the documented inequality experience of Bulgaria for the growth take-off and the rising part of the curve; of the Czech Lands for the more mature stages of development presumably accompanied by the decline in inequality. [...] of the top-1%), shpY , as depending on the size of the labor and capital share, 1 − α and α, and the share that the percentile p has in the total labor and capital income, shpY L and sh p Y K (for the sake of simplicity, we ignore the so-called “alignment” coefficients). [...] Turning to other groups, the mass of workers, as the second largest social group in pre-communist Bulgaria (accounting, however, for less than 15% of the labor force; compare with Figure 4) resided in the (lower-) middle parts of the distribution, while the densities of employees and independents outside of agriculture were largely concentrated in the right-hand part of the distribution.