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

Abstract

We use Pareto imputation, survey reweighting, and microsimulation methods applied to combined household survey and tax return data to re-evaluate trends in income inequality and redistribution in the follow up of the post-socialist transition in Poland. Our approach results in the first estimates of top-corrected inequality trends for real equivalised disposable incomes over the years 1994–2015, a period so far believed to represent a time of not only stable and but also equitable growth. The adjustments applied suggest that the Gini coefficient grew by 14–26% more compared to the uncorrected survey-based estimates. This indicates that over the last three decades Poland has become one of the most unequal European countries among those for which top-corrected inequality estimates exist. Looking at different centiles of the distribution shows that incomes at the top grew fastest during the post-transition years: the annual rate of growth of the 95-99th percentiles of income distribution exceeded 3.5%, while the median income grew by about 2.6%.The findings shed a new light on recent political developments in Poland.