Wealth Inequality in Central and Eastern Europe: Evidence From Joined Household Survey and Rich Lists’ Data

Abstract

ic ch ha al l B Br rz ze ez zi in ns sk ki i a a * *, , K Ka at ta ar rz zy yn na a S Sa ał ła ac ch h a a , , M Ma ar rc ci in n W Wr ro oń ńs sk ki i b b

Why Wealth Inequality Differs Between Post-Socialist Countries?

“…The major limitation of their study, however, was the use of the Survey of Health, Ageing and Retirement in Europe (SHARE) data, which covers only the population aged 50 and above. Skopek et al's (2014) results are in line with those of Brzeziński et al (2020), who use the HFCS data for 2013/2014 and analyse entire populations of the selected CEE countries.…”

“…Empirical studies have shown that due to this 'missing rich' phenomenon the top 1% wealth share in such countries as Austria or Germany is underestimated by as much as 8-10 percentage points (Bach et al 2019;Vermeulen 2018). In our companion paper, we show that the size of analogous corrections for most of the CEE countries range from 7 to 15 percentage points in case of top 1% share, and from 4 to 11 percentage points in the case of Gini index (Brzeziński et al 2020).…”

“…In this paper, we shed light on the differences in wealth inequality among the selected Central and Eastern European (hereinafter: CEE) post-socialist countries. In a companion paper (Brzeziński et al 2020), we have found that surprisingly there are huge differences in wealth inequality levels in emerging market economies of the CEE region, even after accounting for the phenomenon of the missing rich persons in household surveys. In this paper, we use microeconomic decomposition techniques to study the contribution of socio-economic and demographic characteristics to cross-country differences in the distribution of wealth.…”

“…Note: countries sorted by the value of the unadjusted Gini index. Source: For Estonia, Hungary, Latvia, Poland and Slovakia: Brzeziński et al (2020). For Germany, France and Spain: Bach et al (2019).…”

“…The procedure minimizes a distance measure between initial and adjusted weights subject to calibration equations. In our case, we calibrate the HFCS survey weights to match the top 5% wealth share estimated with original HFCS survey weights with the topcorrected top 5% wealth shares calculated in Brzeziński et al (2020) for the CEE countries based on the joined HFCS data and data from the relevant national rich lists. 8 Using this approach, we do not add any direct information on wealth or socio-economic characteristics of the missing rich persons to the HFCS data.…”