Analysing Income Inequality in Serbia - From Data to Policy

High income distribution inequality is bad for economic growth, both directly and as a potential source of significant political and social instability. Serbia has higher income distribution inequality than any country of the European Union, which is the result of low redistributive power of taxes, social transfers and a troubled labour market situation.

In Serbia income inequality is greatest in households with a very low labour intensity whose members do not work or work very little (less than 2.5 months a year).

Concrete policy reform proposals to decrease income inequality include: increasing employability options for those with a low level of education, increasing the number of good quality full-time jobs in the formal sector, increasing progressivity within personal income tax and improving pension coverage for the female population.