The Fabric of Transition: Unraveling the Weave of Labor Dynamics, Economic Structures, and Innovation on Income Disparities in Central and Eastern Europe Nations

Adriana AnaMaria Davidescu (), Oana-Ramona Lobonţ and Tamara Maria Nae
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Adriana AnaMaria Davidescu: Department of Statistics and Econometrics, The Faculty of Economic Cybernetics, Statistics and Informatics, The Bucharest University of Economic Studies, 010552 Bucharest, Romania
Oana-Ramona Lobonţ: Department of Finance, Faculty of Economics and Business Administration, West University of Timisoara, 300223 Timisoara, Romania
Tamara Maria Nae: Department of Economics and Economic Policies, Faculty of Theoretical and Applied Economics, Bucharest University of Economic Studies, 010552 Bucharest, Romania

Economies, 2024, vol. 12, issue 3, 1-13

Abstract: In recent years, the issue of income inequality has ascended to the forefront of national and international agendas, underscored by the urgency to navigate the complexities of market-driven economies without exacerbating social disparities. These challenges are particularly pronounced in the post-communist nations of Central and Eastern Europe, where the transition legacy and the marketization forces present unique dynamics in the evolution of income disparities. This research investigates the intricate mechanisms through which marketization impacts income inequality within the Central and Eastern European countries context, aiming to uncover how economic transformations influenced by global sustainability goals can contribute to narrowing the income gap. By employing panel data estimation techniques and Generalized Method of Moments (GMM) analysis, this study highlights the enduring nature of income disparities and the critical roles played by economic growth, education investment, labor market reforms, globalization, and governance quality in shaping equitable income distributions. Findings reveal that, despite the competitive nature of market economies potentially creating disparities, strategic policy interventions in education, economic policy, and labor market regulations can mitigate the adverse effects of marketization on income inequality. Additionally, this research emphasizes the importance of strong institutional frameworks and the nuanced role of the informal economy in influencing income distribution dynamics.

Keywords: income inequality; determinants; CEE countries; panel data approach; GMM; social progress; convergence (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2024
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