Sharing the gains of transition: Evaluating changes in income inequality and redistribution in Poland using combined survey and tax return data

Polish inequality statistics reconsidered: are the poor really that poor?

“…According to most of the empirical studies based on household surveys, recent income inequality in Poland is moderate, considering the European standards, and decreased significantly after peaks reached during the first decade of the 21st century (time series for the official Gini indices covering 1995-2015 period may be found in Brzeziński et al, 2022). However, a prevailing part of those studies ignore the problem of the data quality and representativity, although there are reasons to assume that nominally low declared incomes are frequently underestimated, especially in tails of the distributions.…”

“…However, a prevailing part of those studies ignore the problem of the data quality and representativity, although there are reasons to assume that nominally low declared incomes are frequently underestimated, especially in tails of the distributions. This affects also official inequality measures in Poland, which may be substantially underestimated, as demonstrated by Brzeziński et al (2022) on the basis of combined survey and tax return data for 1995-2015 period. Further consequences of prospective underestimation of the official inequality are of political nature, as concluded by those authors: underrating by the previous governments importance of the (real) inequality and degree of the redistribution might be one of the reasons for reaching the parliament majority by Law and Justice (Prawo i Sprawiedliwość) party in 2015 election.…”

“…Nevertheless, calculation of more accurate inequality indices definitely may shed more light on the abovementioned issues in Poland, especially on discrepancy between the official indicators and the inequality perception. In this study some estimates obtained by Brzeziński et al (2022) are utilised to correct incomes in the upper tails of the distributions for 2014 and 2015 years. Corrections of the household survey incomes are also performed at the bottom tails, which is an added value of the present research.…”

“…In the first one additional datasets, usually tax registers, are utilised. Household survey data are combined with administrative records to provide more reliable income statistics at the upper tails of the distribution (Jenkins, 2017, Bartels and Metzing, 2018, Blanchet, 2018, Medeiros et al, 2018, Davern et al, 2019, Brzeziński et al, 2022. The literature on "decontamination" of low declared incomes is rather narrow.…”

“…According to most empirical studies based on household surveys and considering the European standards, the recent income inequality in Poland is moderate and decreased significantly after reaching its peaks during the first decade of the 21st century. These findings were challenged by Brzeziński et al (2022), who placed Polish income inequality among the highest in Europe. Such a conclusion was possible when combining the household survey data with information on personal income tax.…”