Disparities in market Income and Household Disposable Income in the Czech Republic between 1988 and 2002 - Abstract

The market economy functions efficiently when the people’s standard of living corresponds to their work and earnings. However, there are many factors that mediate between gross earnings and disposable household income: employment of household’s members, the number of children, and redistribution through taxes and transfers. While labor economics deals with wage disparities according to education, branch and gender, little evidence is available on the correlation between earnings and household income, and on how the standard of living of households is shaped by the characteristics of individuals. Thus the aim is to analyze how the labor market affects earnings and the disposable household income. The relationship between the market and disposable income will be surveyed across time. Microcensus data from 1989, 1996 and 2002 make it possible to answer various questions for the CzechRepublic. What was the direction and extent of the change in disparities of personal earnings and household income? What are the net effects of market income and family structure on household income? How much do taxes and social benefits affect household income at various levels? Decomposition analysis will be used to separate labor market and family effects in various social groups and by income sources.