Transition Change in Income by Percentile – Bulgaria and Russian

July 23, 2019


The figures below plot the change in pre-tax income (see the definition below) for Bulgaria from 1980 to 2015. In one figure the changes Bulgaria experienced from 1980 to 2015 are contrasted with the experience of Russia. While the distribution of income growth in Bulgaria has clearly not been equitable since the 1980s, it has been Pareto efficient (all percentiles displayed saw gains). The case of Russia has been different: over 75 percent of households in Russia have seen negative income growth since 1980. While the top one percent has seen their documented pre-tax income grow by over 600 percent since 1980. 

Despite income growth being widely unequal in Bulgaria, the strong gains that the top percentiles saw were concentrated in the early years of the economic transition.  While a few years after the adoption of market forces and privatization, growth was more equitably distributed. For the years of 1996 to 2012, incomes grew by over 50 percent for all percentiles. 


From 2003 to 2013, a similar pattern of equitable growth was seen with all percentiles seeing over 30 percent growth in their incomes over the decade. 


Source: World Inequality Database. See documentation and discussion of data collection methods here. Administrative data (tax data) is used to account for individuals at the top of the income distribution, while survey data is used for individuals at the bottom of the income distribution.


Note: The definition of income used here 'corresponds to the income that people receive after the operation of the pension system and unemployment insurance, but before other forms of redistribution. Therefore, it is the sum of income from labor and capital, pension and unemployment benefits, after paying social contributions but before paying the income tax and receiving social assistance benefits. Pre-tax income also includes forms of income that are part of national income yet do not explicitly show up on anyone’s bank account. This includes imputed rents from owner-occupied housing, and the retained earnings of corporations.'




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