Changes in the Earnings Distribution in Slovenia during Rapid Growth, 1991-2005

This paper analyses the dynamics of income inequality of wage earners in Slovenia from 1991 to 2005, using two different datasets. Both are derived from the personal income tax files. The first is obtained by the Statistical Office of Slovenia, extracting all full-time employees from these files by using the central registry of the active population and tabulating the results. The second source is a large simple random sample from this same personal income tax file; for the purpose of our analysis, employees were suitably extracted from this sample. Our results show that income inequality of wage earners has increased dramatically in the very first years of transition (1991-1993), followed by less spectacular increases up to 1999. Since 1999 changes have only been small. Our analysis also shows that important increases in income have been achieved by the top wage earners.