<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The paper analyzes the distributional effects of social transfers in Bulgaria in the period 2000-2014, using income inequality decomposition by factor components. The results suggest that social transfers mitigate income inequality, but this effect varies depending on the type of transfer. Pensions exert the strongest influence due to their significant share in total income, which also rises over time. Family allowances are pro-poor in nature, but because of their small share in beneficiaries’ total income, their impact on overall inequality is much weaker. “Other social benefits” have the weakest inequality-reducing effect, which is due to their higher concentration towards the richest decile and increasing share in total income. Despite the inequality-decreasing impact of social transfers, we argue that they should not be regarded as the sole remedy for the sharp income disparities in the country, but need to be accompanied by relevant active labor market policies.</p></abstract>

The paper analyzes the distributional effects of social transfers in Bulgaria in the period 2000-2014, using income inequality decomposition by factor components. The results suggest that social transfers mitigate income inequality, but this effect varies depending on the type of transfer. Pensions exert the strongest influence due to their significant share in total income, which also rises over time. Family allowances are pro-poor in nature, but because of their small share in beneficiaries’ total income, their impact on overall inequality is much weaker. “Other social benefits” have the weakest inequality-reducing effect, which is due to their higher concentration towards the richest decile and increasing share in total income. Despite the inequality-decreasing impact of social transfers, we argue that they should not be regarded as the sole remedy for the sharp income disparities in the country, but need to be accompanied by relevant active labor market policies.

Social Transfers and Income Inequality in Bulgaria

South East European Journal of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Social Transfers and Income Inequality in Bulgaria"}

The paper analyzes the distributional effects of social transfers in Bulgaria in the period 2000-2014, using income inequality decomposition by factor...

Social Transfers and Income Inequality in Bulgaria

Published Online: Jul 06, 2017

Page range: 38 - 49

DOI: https://doi.org/10.1515/jeb-2017-0003

Keywords
social transfers, income inequality, redistribution

© 2017 South East European Journal of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Social Transfers and Income Inequality in Bulgaria

Published Online: Jul 06, 2017

Page range: 38 - 49

DOI: https://doi.org/10.1515/jeb-2017-0003

Keywordssocial transfers, income inequality, redistribution

© 2017 South East European Journal of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
social transfers, income inequality, redistribution