Employment Polarisation and Inequality in the UK and Hungary

This paper uses household budget survey microdata to explore the growth in household income inequality in Hungary for the period 1987 to 1995, and compares it with inequality in the UK in 1995/96. Decomposition of inequality according to both household characteristics and income sources shows that, while inequality did grow rapidly in Hungary over the early Transition period, several factors prevented its growth to even higher levels. One of these factors, the distribution of employment and earnings between households with and without employed members was less of a feature in Hungary than in the UK. A narrowing of the gender pay gap and a continued high level of female participation appears to have ensured that, though earnings inequality in Hungary increased to surpass that in the UK, the distribution of household earnings and the distribution of household incomes remained more equal in Hungary.