Income Inequality in Bulgaria

Proceedings of The 7th International Conference on Research in Business, Management and Economics

Year: 2023



Income Inequality in Bulgaria

Prof. Dr. Julia Dobreva




Income inequality in Bulgaria has been going through a process of dynamic changes in the last 30 years as a result of the socio-economic development of the country. Bulgaria has made a difficult but successful transition from planned economy to open market modern economy since 1990. The impact of institutional changes has also contributed to the unequal distribution of income and wealth, which is considered to be the main reason for income inequality today. Among the main factors, which have led to income inequality in Bulgaria are the transition from planned to market economy and the development of the private sector since 1990, the global financial and economic crisis 2007-2009, the change in the tax system introduced in 2008, the share of the shadow economy and unofficial employment,  the structure of the economy, the unequal distribution of labour force in the regions, the demographic aspects, the COVID-19 crisis in 2020-2021 and its economic aftermaths, including increasing inflation in the end of 2022. Currently the polarisation of income of the richest 20% and the poorest 20% of the population in Bulgaria is very high, while only 10 years earlier it has been equal to the average EU levels. This paper discusses the main factors, contributing to income inequality, it identifies the reasons which have led to the increase in inequality in Bulgaria and recommends measures to be applied in order to reduce income inequality in the next decade and achieve social sustainability.

keywords: poverty, inequality, crisis, sustainability, unemployment