INCOME INEQUALITY IN HUNGARY,

Long run evolution of inequality of per capita household income Source: Tóth, 2002, Data are from: : Hungarian Central Statistical Office Income Survey; 1992, 1995, 1996: Hungarian Household Panel; 1999–2009: Tárki Household Monitor.

Increasing inequality of labour income Shrinking share of labour income: Employment decline (emp. rate from 76% (1990) to 58% (1996)) Increase in capital income: entrepreneurial income, privatisation Austerity package 1995: freezing wages in public sector, means- tested family allowance, rising retirement age, tuition in higher education, Steep increase in income inequalities (1)

Inequality of gross monthly earnings of full-time employees (men and women) Note: Data are gross monthly earnings of full-time employees in May of each year. Data source: Enterprise survey (Survey of Individual Wages and Earnings). Before 1994, workers in private enterprises of less than 20 employees were not included. Since 1994, the sample also covers enterprises with employees. Data exclude enterprises with 5-9 employees. Data include 1/12 of non-regular payments from previous year Source: OECD Earnings Database rising returns to education rising regional wage differences But lowering gender wage gap less steep age profile Steep increase in income inequalities (1)

Moderate decline in income inequality (1) Share of per capita personal income deciles from total HH disposable incomes between 1962 and 2009 Source: 1962–1987: KSH income surveys, Atkinson–Micklewright [1992] Table HI1.; 1992–1996: HHP waves I–VI., 2000–2009: Tárki Household Monitor.

Moderate decline in income inequality (2) Social and economic policies influencing income distribution Between 2002–2006: 50% increase of public sector wages Introduction of 13th month pension Redirecting family support to lower income groups (abolishing family tax allowances, raising family allowances) VAT reduction After the summer of 2006: Increasing health care insurance contribution Increase of the upper rate of individual income tax Increase of the rate of EVA (”standardized entrepreneur tax”) They drive to the same direction: first the lower-middle class get better, then the status of the upper-middle class get worse.

Inflation (14%) Average income growth (7%) No change level Change in average incomes of various income deciles (person equivalent* income) between 2007 and 2009 * e=0.73 The crisis years, changes between (1)

Share of per capita personal income deciles from total HH disposable incomes between 1962 and 2009 Source: 1962–1987: KSH income surveys, Atkinson–Micklewright [1992] Table HI1.; 1992–1996: HHP waves I–VI., 2000–2009: Tárki Household Monitor. The crisis years, changes between (2)

Ratio of lower cutpoint of top decile and upper cutpoint of lowest decile (P90/P10) Ratio of top/bottom decile shares (S10/S1) Gini coefficient Forrás: 1987: KSH jövedelemfelvétel; 1992–1996: Magyar Háztartás Panel I–VI. hullámai, 2000–2009: Tárki Háztartás Monitor. Megj: 95% konf. int. mellett, személyi ekvivalens jövedelmek személyi eloszlása alapján. Szeg. Ráta 1987: e=0,73 alapján Relative poverty rate (OECD2: median 60%) The crisis years, changes between (3)

No. of Persons living in households with different emplyoment composition adults (estimate, 000 persons) Hh head empl, no other empl. Hh head empl, + other empl. Hh head inactive head pensioner, no employed head pensioner, + employed The crisis years, changes between (4)

Proportion of households repaying bank loans by income quintile The crisis years, changes between (5) Source: Tárki Household Monitor

Percentage of households who have been in arrears of repaying debt during year 2009 The crisis years, changes between (6) Source: Tárki Household Monitor

Percentage of households experiencing living difficulties The crisis years, changes between (7) Source: Tárki Household Monitor

At-risk-of-poverty rate by age, (%) Source: TÁRKI.

A summary of poverty analysis socio-demographic profile Significant increase: between and Consistent high risk group consistent low risk group village Budapest 3+ children0 child inactive hh headsecond earner in the hh max. primary educ. headat least secondary educ. Romanot roma high risk, increased: households with at least 1 child and for the primary educated low risk, decreased: head 60+, pensioner headed hh