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Changing Inequalities and Societal Impacts in Rich CountriesThirty Countries' Experiences$
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Brian Nolan, Wiemer Salverda, Daniele Checchi, Ive Marx, Abigail McKnight, István György Tóth, and Herman G. van de Werfhorst

Print publication date: 2014

Print ISBN-13: 9780199687428

Published to Oxford Scholarship Online: April 2014

DOI: 10.1093/acprof:oso/9780199687428.001.0001

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A Country Caught in Its Own Trap

(p.322) Chapter 14 Hungary
Changing Inequalities and Societal Impacts in Rich Countries

Zoltán Fábián

András Gábos

Marianna Kopasz

Márton Medgyesi

Péter Szivós

István György Tóth

Oxford University Press

In Hungary income inequality started to increase in the eighties. After a marked increase during the first years of transition, reaching a plateau, in 2004–2008 inequality decreased. Redistribution policies played a significant role, first increasing transfers to the lower middle class, then increasing taxation of the upper middle class. Poverty increased sharply during the early 1990s and went along with significant shifts in the welfare levels of elderly and children, small and large families. The traditionally low level of trust remained stable. The low level of social cohesion and high level of perceived conflicts between social groups may be an outcome of social inequalities and lack of effective social policy measures. However, lack of trust and altruism can be a cause of social segregation and growing inequalities. The chapter concludes that there is not simply a linear causality from inequality to various social impacts but reverse causality also plays a role.

Keywords:   income inequality, drivers of inequality, education, transition, Hungary, social segregation, taxation, poverty, trust, redistribution

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