Labour Market Institutions and Income Inequalities in the Visegrad Group Countries

Abstract

The diversity of the labour market in the Visegrad Group countries is presented in the article from an institutional perspective. Institutions such as different tax and transfer policies, employment protection legislation, or active and passive labour market policies can affect not only the effectiveness of the economy from a macro perspective, but they can also be crucial in determining the system of rules and incentives for earning money. The institutional conditions of the labour market directly affect the behaviour of labour market participants, their incomes, and therefore income inequalities. To asses and compare the situation between the Visegrad group countries, a synthetic measure of labour market institutions is calculated. A taxonomic analysis is done to group the V4 countries against other selected European Union countries, which enables the assessment and comparison of similarities and differences across the Visegrad countries. Finally, the trade-offs between a synthetic measure of labour market institutions and income inequalities are analysed. The Pearson correlation coefficient and, additionally, the Spearman’s rank correlation coefficient are applied. The analysis is done for 2016, as it was the most recent data available while writing the article. The results from such an analysis can help to answer the question of the state’s role in limiting income inequalities through labour market institutions and to identify the policies which are the most effective in this field.

Green and Digital Transitions

“…Aside from the previously identified transitional and structural issues, the next strand of literature has taken a partial approach to exploring the sources of income inequality by keeping a cross-country perspective in EE countries. These sources include economic development (Tsaurai, 2020), globalization and technological progress (EspositoStehrer, 2009;Josifidis et al, 2021;OECD, 2011), labor market institutions (OECD, 2011;SzczepaniakSzulc-Obłoza, 2020), education and human capital accumulation (Omoeva et al, 2018;OECD, 2011), demographic shifts (Dolls et al 2019), migration (Docquier et al, 2019), and firm characteristics (Magda et al, 2021).…”

Explaining income inequality by the relationship between social network fragmentation and social segregation indicators

“…Aside from the previously identified transitional and structural issues, the next strand of literature has taken a partial approach to exploring the sources of income inequality by keeping a cross-country perspective in EE countries. These sources include economic development (Tsaurai, 2020), globalization and technological progress (EspositoStehrer, 2009;Josifidis et al, 2021;OECD, 2011), labor market institutions (OECD, 2011;SzczepaniakSzulc-Obłoza, 2020), education and human capital accumulation (Omoeva et al, 2018;OECD, 2011), demographic shifts (Dolls et al 2019), migration (Docquier et al, 2019), and firm characteristics (Magda et al, 2021).…”