Catherine Hegya
According to the National Institute of Economic Research (NIEI), in 2020, 20% of the population in the IX-X deciles (a numerical characteristic that divides an ordered set of values, in this case – income, into ten equal parts) accumulated 40.5% of the total income. In 2024, their share increased by 1.4 p.p. to 41.9%. This indicates an even greater concentration of resources among the upper deciles of income distribution. At the same time, the share of income of the 20% of the least well-off citizens (I-II deciles) decreased only slightly (by about 0.2 p.p.). This indicates not so much a worsening of their situation as a faster growth of incomes of the rich.
In addition, the gap between the extreme deciles remains large: the income gap between the poor and the rich increased from 8.7% in 2020 to 9.3% in 2024. This suggests that the acceleration of income growth among the upper deciles was the main factor behind the increase in inequality and, consequently, the slight increase in the Gini coefficient (a statistical measure of the degree of social stratification).
Dr. Ekaterina Hegia, Doctor of Economics, Senior Researcher at the “Social Studies and Living Standards” Division of the National Institute for Economic Research ASEM, believes that in the conditions of the modern Moldovan economy, mitigating income inequality requires a combination of short-term public policy measures and structural reforms.
“In the short term, the main instruments remain an increase in the minimum wage and an increase in the minimum pension, which will strengthen the incomes of the most vulnerable groups and reduce the gap between the lower and upper deciles of the income distribution. In the medium term, it is important to consider introducing elements of progressivity in tax policy, which would allow for a more equitable distribution of the tax burden and increase the redistributive potential of the budget. These measures, combined with the modernization of social benefits and strengthening of support mechanisms for low-income households, may contribute to a gradual reduction of income inequality in the coming years,” Catherine Hegia shared with Logos Press.
In the Republic of Moldova, there is still a gap between the European standards and the existing national mechanisms for ensuring equality and social protection. One of the key aspects is the implementation of the European benchmarks for setting the minimum wage at the level of at least 50 per cent of the average wage. In this respect, it should be recalled that the trade unions proposed to set the minimum wage at 8,050 lei. But, according to the Finance Ministry’s estimates, it will amount to 6,300 lei, based on “the budgetary capacity and available resources”.
“It is important to note that even in the EU countries, the application of this standard is heterogeneous, which provides some flexibility, but at the same time emphasizes the scale of the necessary reforms,” Catherine Hegia notes.
According to the scholars, the main challenges include the need to adapt the national legislative framework to the European standards, ensuring the financial sustainability of the proposed changes and increasing the efficiency of administrative structures.
“Despite all the difficulties, the Government and the Ministry of Labor and Social Protection are gradually moving towards the implementation of EU directives and recommendations,” says Ekaterina Hegya.
