Belarusian Economic Research and Outreach Center

Spatial wage inequality in Belarus

This paper studies the wage inequality in Belarus' districts from 2000 till 2015 following the multi-step and multi-mechanism framework. The empirical results show: first, that wage disparities across the districts decreased in the 2000-2012 period and then increased from 2013 to 2015; second, there is the spatial dependency in district wages and increasing separation between districts, and between rural and urban population in Belarus; third, the main economic factors that contribute to decrease in district wage inequality are industrial development, retail trade and agricultural development. Finally, from theoretical point of view this research rejects the inverted U-shaped relationship between spatial inequality and economic development for Belarus and supports the hypothesis made by French economist Thomas Piketty that slow growth rates lead to rising inequality.