Primary Income Distribution: Labour Market’s Role In Selected European and Transition Countries

Abstract

Purpose: The aim of this study is to show how the concentrations of primary income can be related to the labour market structure in two samples of selected European and transition countries. Then it focuses on the differences in the transitional path of Poland and Russia that justify the current divergences in the distribution of income in these two countries.

Methodology: This research, in its empirical part, is based on cluster analysis and principal component analysis (PCA). By these techniques, the study defines which main factors of the labour market are more involved in the distribution process in the selected countries.

Findings: On the basis of the data used, it seems possible to establish a relationship between different labour market models and the degree of primary income inequality, focusing on which variables are more relevant with respect to the different labour market systems.

Originality: This research deals with the aspect of the concentration of primary income in different economies with cluster and principal component analyses, considering the shortage of related economic data in this field of research.