B&H is one of the countries with the highest economic inequality in Europe and the region. FYR Macedonia is maybe the only country with higher inequality than B&H. According to data on taxed income provided by the tax Administration of the Republic of Srpska for the purpose of this research, we have come to the following conclusions:

• Only 1% of all persons receiving salary for their work in the Republic of Srpska earns more than 3.000 BAM a month or more;
• The remaining 99% received 584 BAM on average per month in 2014; The richest 1% earned as much as 139.000 persons (42% of all persons receiving salary);
• The richest 23 persons (out of whom each one earned more than 1 million BAM) earned as much as 76.700 persons (23% of all persons receiving salary); The highest annual income in the RS in 2014 was 10.9 million BAM (after taxation);
• The most important source of income for 99% persons was employment, while dividends and shares in income were more important than employment for the richest 1%.
  Unfortunately, the Tax Administration of the Federation of B&H denied our request for equivalent data.

Economic inequality increased during the last 2-3 decades in most countries of the world, resulting in wealth concentration with a small number of the richest individuals and increase in poverty among the employed. Even though a number of developing countries experienced fast economic growth over this period (e.g. China), the biggest income growth was realized by the richest residents of those countries. From the aspect of the world as a whole, today’s level of inequality is astounding. Here are several pieces of data from existing research papers:

• The value of property owned by the richest 1% residents of the world exceeds the value of property of the rest of the world combined;
• The world’s richest 62 individuals own fortune that exceeds the wealth of the poorer half of the world population (3,6 billion people);
• Over the last 5 years the value of property of the richest 62 individuals increased by over 500 billion USD, while the value of property of the poorer half of the world dropped by over 1000 billion USD.

Due to a lack of information on the value and ownership of property among the population of B&H, which would best reflect the degree of economic inequality, this research focuses on the analysis of income distribution.

Detailed analysis can be found here. (local language only – English version coming soon)