engleski

Economic Growth of the European Transitional Countries

Development differences, low level of education and income inequality are the problems the European transitional countries have to cope with to enhance the prosperity and to catch up with the developed and so accelerate the accession to the EU. The level of schooling certainly influences the income growth. The group of 13 Central and Eastern European transitional countries has the combined primary, secondary and tertiary gross enrolment ratio under 80%, and 5 % of income. That is 30% of European population. The experience on the world sample of countries is that per capita annual growth of 2.5 % for a five years period falls significantly (from 70% to 44%) if the education Gini is greater than 0.30. During the 1990s, Central and Eastern Europe was the region that suffered a decline in per capita income. The amount of growth required to reduce poverty depends on a country`s level of inequality. The human development index gives another way to look at the distribution of human development achievements within countries. Comparing the levels of GDP per capita in the year 2000, Croatia would reach Slovenian GDP per capita level in 11 years, in case that Croatian annual growth rate was 7%. It seems an unattainable goal. Income disparities create strong pressure for migration, especially the young educated part of the population. Concerning also other demographic indicators, the accelerated economic growth is a question of our sustainable future.

economic growth; income inequality; human capital

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