Market transition or path dependency? Changing effects of income determinants in the Czech Republic, Hungary, Poland, Russia, and Slovakia, 1991–2002

A major issue in the market transition debate on transitional societies is the extent to which changing economic institutions are responsible for the changing stratification order in post-Communist societies, as assumed by the Market Transition Theory (MTT). Advocates of path dependent transformation processes assume varying transformation processes across post-Communist societies. They have criticized the MTT of being insensitive to the different paths of transformation post-Communist societies go through and the way this will influence changes in the effects of income determinants. This study will test the extent to which trends in the effects of income determinants converge across post-Communist societies. A cross-national and across time comparative research design will be employed, analyzing 61 cross-sectional, standardized surveys for five Central and Eastern countries covering the period 1991–2002. Results from modified weighted least squares regression analyses show an increasing trend in the effect of years of education on standardized personal income for all five countries as predicted by the MTT. Income effects of years of experience, private sector employment and gender do not show increasing trends for all countries, contradicting the MTT. The empirical trends in effects of income determinants are to a great extent consistent with Stark’s typology of privatization strategies, giving some support to the theoretical notion of path dependent transformation processes