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This paper investigates the relationship between income inequality and  different welfare state trajectories that three countries of the former  Yugoslavia “south of the Alps” have taken over the three decades since the  breakup of the country in 1990. It is remarkable that three countries  emerging from a common (socialist) system have experienced diametrically  opposing outcomes regarding inequality. Slovenia has one of the lowest  levels of income inequality in Europe, Croatia an average level of  inequality, and Serbia one of the highest levels. The paper first examines  the extent and nature of income inequality in the three countries before  examining the determining causes of inequality, rooted in the evaluation of  labour markets, education systems, and tax-benefit systems. It concludes  that the divergent transition paths have created the different inequality  outcomes observed in the three countries.

Income inequality in transition economies: A comparative analysis of Croatia, Serbia and Slovenia