Peculiarities of income distribution in selected countries

Abstract

The research is dedicated to the analysis of income distribution in selected countries. Middle segment of households with disposable income between 10 000 USD and 30 000 USD is in the focus of the performed here analysis. The following assumption is being raised: the pattern of income distribution, and especially the size of middle class are the preconditions for sustainable entrepreneurship in every country. We compare the current income distribution in developed countries with that in slightly less developed countries. After that, we select Latvia and Lithuania for a deeper analysis: we forecast the middle segment changes during the medium time span (until 2020) and for a longer time span (until 2030). Along with comparative analysis modelling of various scenarios is also performed (such as the recession of the Eurozone, no-compromised Brexit etc.). Finally, forecasting of middle-income segment development in Latvia and Lithuania for long time span is performed in USD and Purchasing Power Party expressions. The obtained results signal about the comparative insensitivity of Latvia and Lithuania to external shocks with worsening of middle class position. The performed research reveals that maintaining a positive entrepreneurship system is virtually impossible without purposefully articulated and rather radical economic policy.