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South East European Journal of Economics and Business

The Journal of University of Sarajevo

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CiteScore 2016: 0.30

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Social Transfers and Income Inequality in Bulgaria

Svilena Mihaylova / Silviya Bratoeva-Manoleva
Published Online: 2017-07-06 | DOI: https://doi.org/10.1515/jeb-2017-0003


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.

Keywords: social transfers; income inequality; redistribution

JEL Classification: I38; H55; D31


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About the article

Published Online: 2017-07-06

Published in Print: 2017-04-01

Citation Information: South East European Journal of Economics and Business, Volume 12, Issue 1, Pages 38–49, ISSN (Online) 2233-1999, DOI: https://doi.org/10.1515/jeb-2017-0003.

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© 2017 South East European Journal of Economics and Business. This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License. BY-NC-ND 3.0

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