How sticky is the per capita income?

Adrián Csizmadia – Tibor Bareith

Regional and Business Studies, Vol. 16. No. 2. 2024. p. 5-19.

Abstract

In our settlement-level study using the Markov chain method and dynamic regression panel models, we found that in the period 2011-2021, income in the previous year strongly affects income status, i.e., income shows high persistence. Despite the steady increase in per capita income over the period under study, the spatial structure of the income distribution shows a fixed state, with a high degree of stability: poor municipalities remain poor, while rich municipalities remain rich. Only in the Central and Western Transdanubian regions is there a greater chance of a municipality’s population moving into a higher income category. The results of the regression models show that, in addition to the income level of previous years, the higher number of self-employed, the greater distance of settlements from cities and Budapest, the employment structure and the higher share of job seekers have a significant impact on the income of the population.

Keywords:

income persistence, income distribution, factors affecting income, Markov chain, dynamic panel model

https://doi.org/10.33568/rbs.5661