Earnings Disparities in the Czech Republic: Evidence of the Past Decade and Cross-National Comparison

Wage and income surveys covering the period 1989-1999 are used to display changes in inequality of earnings and main factors of disparities. In the first part, increasing differences in the Czech Republic and the decreasing weight of demographic characteristics in wage structure are observed. In the second part, available evidence on cross-national comparison is gathered in order to demonstrate the increasing similarity of the Czech wage structure with that in Western countries. We document that the introduction of a market economy has led to an increase in earnings disparities more similar to those in the West; the "communist" demographic determination of earnings is being replaced to a great extent by "capitalist" market characteristics; and ownership disparities, instead of political privileges, have come to the fore. Thus, the overall earnings structure underwent systemic changes and approaches the Western pattern.