Changes in the Rate and Types of Poverty: The Czech and Slovak Republics 1990–1993

Abstract

The beginning of the economic transition in all post-communist countries has caused a number of social problems. First, price liberalization has led to a general decrease in the purchasing power of incomes and thus has made an increasing part of the population vulnerable to poverty. Second, the reduced state monopoly and the start of privatization of big enterprises has resulted in unemployment, which was mostly unknown until this time. In addition to the “old poverty”, which especially endangered single headed or large families and the oldest pensioners, there is an emerging “new poverty” which stems from unemployment or the low adaptability of some households to the new conditions. Economically unstable households are those that are the least able to take advantage of the new possibilities and to mobilize alternative economic sources (e.g., transferring to the expansive segments of the labor market, utilizing secondary incomes, making use of old or newly acquired real estate, etc.).

This research was supported by the ACE Grant No. ERB4012PL9 10135 “Poverty, Welfare Policy and Work Incentives in the Czech and Slovak Republics” of the European Community and Grant No. 828106 “Labor Market, Income Distribution and Social Policy during the Period of Transformation” of the Grant Agency of the Academy of Sciences, Czech Republic. Thanks are due to Stein Ringen, Oxford University, Vanessa Fry, University of Essex and especially to Thesia I. Garner, U.S. Department of Labor for valuable comments.