The relative persistence of income inequality and intra-generational income mobility in Poland during and after the Great Financial Crisis (2008-2015)
DOI:
https://doi.org/10.58567/eal02030004Keywords:
Economic inequality; income distribution; Poland; persistence of inequality; income mobilityAbstract
Poland has experienced a very sharp rise in income and wealth inequality after the economic transition. We measure the relative persistence of income inequality and intra-generational income mobility in Poland during the period 2008-2015. Our research is based on the panel survey data, our subsample includes 501 households. To measure the persistence of income inequality we calculate Shorrocks’s R coefficient. We find that if inequality is measured by the Gini index the relative persistence of income inequality in Poland is similar to Western Europe. In the case of the Theil index and the Mean Log Deviation (MLD), the relative persistence is higher than in a majority of Western Europe countries and similar to the United Kingdom or the United States. The income distribution in Poland is rather stable. Income mobility is lowest at the bottom and at the top of the income distribution. In the middle (3rd) quintile upward mobility is higher than downward mobility. The short-term income mobility in Poland has not changed during and after the Great Financial Crisis and is still medium in comparison with the rest of Europe.
References
Aaberge, R. & Mogstad, M. (2015). Inequality in current and lifetime income. Social Choice and Welfare, 44, 217-30. https://doi.org/10.1007/s00355-014-0838-3
Atkinson, A.B. & Micklewright, J. (1993). Economic transformation in Eastern Europe and the distribution of income. Cambridge: Cambridge University Press. https://econpapers.repec.org/bookchap/cupcbooks/9780521433297.htm
Aristei, D. and C. Perugini (2015a). The drivers of income mobility in Europe. Economic Systems, 39(2), 197-224. https://doi.org/10.1016/j.ecosys.2014.06.007
Aristei, D. and C Perugini. (2015b). Income Mobility in the New EU Member States. In C. Perugini & F. Pompei (Eds) Inequalities During and After Transition in Central and Eastern Europe. Palgrave Macmillan. https://doi.org/10.1057/9781137460981
Bach, S., Thiemann, A. & Zucco, A. (2019). Looking for the missing rich: tracing the top tail of the wealth distribution. International Tax and Public Finance, 26(6), 1234-58. https://doi.org/10.1007/s10797-019-09578-1
Bartels, C. & Metzing. M. (2019). An integrated approach for a top-corrected income distribution. Journal of Economic Inequality, 17(2), 125-143. https://doi.org/10.1007/s10888-018-9394-x
Bönke, T., Corneo, G. & Lüthen, H. (2015). Lifetime Earnings Inequality in Germany. Journal of Labor Economics 33(1), 171-208. https://doi.org/10.1086/677559
Bricker, J., Henriques, A. & Krimmel, J. (2016). Measuring Income and Wealth at the Top Using Administrative and Survey Data. Brookings Papers on Economic Activity, 47(1), 261-331. https://www.jstor.org/stable/43869025
Brzeziński M., Sałach K. & Wroński, M. (2020). Wealth inequality in Central and Eastern Europe: evidence from joined household survey and rich lists’ data. Economics of Transition and Institutional Change, 28(4), 637-660. https://doi.org/10.1111/ecot.12257
Brzeziński, M., Myck, M. & Najsztub, K. (2022). Sharing the gains of transition: Evaluating changes in income inequality and redistribution in Poland using combined survey and tax return data. European Journal of Political Economy, 73, 102121. https://doi.org/10.1016/j.ejpoleco.2021.102121
Bukowski P. & F. Novokmet (2021). Between communism and capitalism: long-term inequality in Poland, 1892–2015. Journal of Economic Growth, 26(2), 187-239. https://doi.org/10.1007/s10887-021-09190-1
Burkhauser, R.V., Hérault, N., Jenkins, S.P & Wilkins, R. (2018). Survey Under‐Coverage of Top Incomes and Estimation of Inequality: What is the Role of the UK's SPI Adjustment?. Fiscal Studies, 39(2), 213-240. https://doi.org/10.1111/1475-5890.12158
Corneo, G. (2015). Income inequality from a lifetime perspective. Empirica, 42, 225-239. https://doi.org/10.1007/s10663-015-9283-5
Creedy, J. (1999). Lifetime versus Annual Income Distribution. In J. Silber (Ed) Handbook of Income Inequality Measurement. Dordrecht: Kluwer Academic Publishers, https://doi.org/10.1007/978-94-011-4413-1
Creedy, J., Halvorsen, E. & Thorsen, T. (2013). Inequality Comparisons in a Multi-Period Framework: The Role of Alternative Welfare Metrics. Review of Income and Wealth, 59(2), 235-249. https://doi.org/10.1111/j.1475-4991.2012.00512.x
Cowell, F. (2011). Measuring inequality. Oxford: Oxford University Press. https://doi.org/10.1093/acprof:osobl/9780199594030.001.0001
Czapiński, J. & Panek, T. (2015).Social Diagnosis 2015. Objective and Subjective Quality of Life in Poland. Contemporary Economics, 9(4), 1-545. https://ideas.repec.org/a/wyz/journl/id476.html
Fields, G. & Ok, E. (1999). Measuring Movement of Income. Economica, 66, 455–471. https://www.jstor.org/stable/2555171
Flemming, J.S. i Micklewright, J. (2000). Income distribution, economic systems and transition. In A.B. Atkinson & Bourguignon, F. (Eds) Handbook of Income Distribution, vol 1. North Holland. https://www.sciencedirect.com/handbook/handbook-of-income-distribution/vol/1/suppl/C
Gangl, M. (2005). Income Inequality, Permanent Incomes and Income Dynamics. Comparing Europe to the United States. Work and Occupations, 32(2), 140-62. https://doi.org/10.1177/0730888404274354
Guvenen, F., Kaplan, G., Song, J. & Weidner, J. (2022). Lifetime Incomes in the United States over Six Decades. American Economic Journal: Applied Economics, 14(4), 446 – 79. https://doi.org/10.1257/app.20190489
Hauser, F. & Fabig, H. (1999). Labor Earnings and Household Income Mobility in Reunified Germany: A Comparison of the Easter and Western States. Review of Income and Wealth, 45(3), 303-24. https://doi.org/10.1111/j.1475-4991.1999.tb00342.x
Jäntti, M. (2015). Income mobility. In A.B. Atkinson & Bourguignon, F. (Eds) Handbook of Income Distribution, vol 2A. North Holland. https://www.sciencedirect.com/handbook/handbook-of-income-distribution/vol/2/suppl/C
Kapitány, Z. & Molnár, G.(2004). Inequality and income mobility in Hungary, 1993–1998. Europe-Asia Studies, 56(8), 1109-29. https://www.jstor.org/stable/4147399
Keane, M.P. & Prasad, E. (2002). Inequality, Transfers, And Growth: New Evidence From The Economic Transition In Poland. Review of Economics and Statistics, 84(2), 324-341. https://www.jstor.org/stable/3211781
Kennickell, A. B. (2017a). Getting to the top: Reaching wealthy respondents in the SCF. Statistical Journal of the IAOS, 33(1), 113–123. https://doi.org/10.3233/SJI-160295
Kennickell, A. B. (2017b) Try, try again: Response and nonresponse in the 2009 SCF panel, Statistical Journal of the IAOS. 33(1), 203–209. . https://doi.org/10.3233/SJI-160294
Kennickel, A.B (2019). The tail that wags: differences in effective right tail coverage and estimates of wealth inequality. Journal of Economic Inequality, 17(4), 443-459. https://doi.org/10.1007/s10888-019-09424-8
Piketty, T. (2014). Capital in the Twenty-First Century, Cambridge, MA: Harvard, University Press. https://www.hup.harvard.edu/catalog.php?isbn=9780674430006
Ricardo, D. (1821). On Principles of Political Economy and Taxation, third ed. Kitchner: Batoche Books (2001). https://econpapers.repec.org/bookchap/hayhetboo/ricardo1821.htm
Rutkowski J. (2001). Earnings Mobility during the Transition: The Case of Hungary. MOST: Economic Policy in Transitional Economies, 11, 71-92. https://doi.org/10.1023/A:1011313632053
Rydliński, B. (2017). Economic Crisis as a Factor of the Neoliberal Policy in Poland. Prakseologia, 159, 39-62. https://ifispan.pl/shop/prakseologia-1592017/
Sandmo, A. (2015). The Principal Problem in Political Economy: Income Distribution in the History of Economic Thought. Atkinson In A.B. Atkinson & Bourguignon, F. (Eds) Handbook of Income Distribution, vol 2A. North Holland. https://www.sciencedirect.com/handbook/handbook-of-income-distribution/vol/2/suppl/C
Savage, M. (2021). The Return of Inequality. Social Change and the Weight of the Past. Cambridge: Harvard University Press. https://www.hup.harvard.edu/catalog.php?isbn=9780674988071
Shorrocks, A. (1978). Income Inequality and Income Mobility. Journal of Economic Theory, 19(2), 376-393. https://www.sciencedirect.com/science/article/abs/pii/0022053178901011
Wroński, M. (2021). Multidimensional inequality in the European Union. The joint distribution of household income, wealth and consumption. Economics & Sociology, 14(3), 205 -219. https://doi.org/10.14254/2071-789X.2021/14-3/11
Wroński, M. (2022). Household wealth in Central and Eastern Europe. Explaining the wealth gap between Poland and Hungary. Bank i Kredyt (Bank & Credit), 53(5), 443 – 474. https://bankikredyt.nbp.pl/content/2022/05/BIK_05_2022_01.pdf
Wroński, M. (2023). The impact of social security wealth on the distribution of wealth in the European Union. Journal of the Economics of Ageing, 24, 100445. https://doi.org/10.1016/j.jeoa.2023.100445
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Marcin Wroński
This work is licensed under a Creative Commons Attribution 4.0 International License.