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Abstract
Through the past few decades the problem of income inequality and welfare segregation has become quite significant for the economies of the countries worldwide. Republic of Macedonia as a country in development is presented with a serious challenge into decreasing the income inequality witch has risen for average 4% annually over the past 15 years, according to the GINI index. Socio-economic inequality can be represented as major problem for a developing country, and must be considered as one of main priorities for increasing the economic development in the following years. Many factors can be targeted as to influence the socio-economic segregation, one of them being the social protection program.
The main goal of this article is to show the impact of social transfer expenditures on the socio economic inequality in Republic of Macedonia measured through the GINI index. In accordance to reaching this goal, the econometric model of regression and correlation was conducted towards determination of the linkage between the social transfers and inequality measured with Gini coefficient. According to the conducted research a true bond and thus the impact on inequality by the social transfer expenditures was determined.
Keywords: income segregation, welfare, social protection benefits, social expenditures.
Jel Classification: G17; C22; G32
INTRODUCTION
Through the past few decades the problem of income inequality and welfare segregation has raised itself as the most significant for the economies of the countries worldwide. The recent estimates show that the world's 85 richest people have the same amount of wealth as the poorest 50 percent. Recent inequality scholarship fixates on trends in the amount of inequality and largely ignores trends in the form of inequality. The authors describe three ideal-typical inequality regimes (big-class, micro class, and gradational) and identify the mechanisms driving a shift toward or away from each of them (Weeden and Grusky 2012). Income inequality is a broader concept then poverty. It defines the level of income distribution in a current country. Even tough inequality can be foreseen as a necessary part of the rewording structure of the modern economic systems which promotes innovation, individuality and entrepreneur initiative; beyond a certain point it can become harmful for the economy and society as hole. High social and economic inequality can lead to high level of...