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This paper investigates the effects of economic growth on income inequality in EU countries by employing econometric models. We estimated the effect of growth on the share of income for all particular deciles of population and on the Gini. Other control variables were included in the models as well. The results showed a negative effect of economic growth on inequality, while this impact is the largest for the deciles ranging from the third to the seventh. This can be perceived as an indication of a shrinking middle class. Inequality-increasing effects were found for long-term unemployment, openness and partly for indicators of importance of the financial sector. Factors reducing inequality were rule of law and population with tertiary education. The size of government turned out to be a rather insignificant determinant.

The article describes the development of Czech social policy & the issues that have surrounded it since 1989. The author begins by describing the character of the communist welfare state & outlining its theoretical alternatives. Despite the introduction of energetic changes during the early years of transition, since the mid-1990s the area of social policy has been dominated by stagnation, & instead of any real & specific efforts in this area there are only debates. Despite all the problems that plague the current social policy, at present the system performs satisfactorily, as is evident in the very low rate of poverty. However, in the long run, concerns may arise over inadequate family situations, a frozen pension system, & poor work motivation. The 'reform' year of 2005 has seen the emergence of many different efforts relating to social policy, but it has not heralded any substantial changes aimed at a more efficient functioning of the system.