Open Access Journal Article

The relative persistence of income inequality and intra-generational income mobility in Poland during and after the Great Financial Crisis (2008-2015)

by Marcin Wron ski a,*
a
Collegium of World Economy, SGH Warsaw School of Economics, Warszawa, Poland
*
Author to whom correspondence should be addressed.
Received: 5 May 2023 / Accepted: 14 June 2023 / Published Online: 24 June 2023

Abstract

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.


Copyright: © 2023 by Wron ski. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

Share and Cite

ACS Style
Wron ski, M. The relative persistence of income inequality and intra-generational income mobility in Poland during and after the Great Financial Crisis (2008-2015). Economic Analysis Letters, 2023, 2, 30. https://doi.org/10.58567/eal02030004
AMA Style
Wron ski M. The relative persistence of income inequality and intra-generational income mobility in Poland during and after the Great Financial Crisis (2008-2015). Economic Analysis Letters; 2023, 2(3):30. https://doi.org/10.58567/eal02030004
Chicago/Turabian Style
Wron ski, Marcin 2023. "The relative persistence of income inequality and intra-generational income mobility in Poland during and after the Great Financial Crisis (2008-2015)" Economic Analysis Letters 2, no.3:30. https://doi.org/10.58567/eal02030004
APA style
Wron ski, M. (2023). The relative persistence of income inequality and intra-generational income mobility in Poland during and after the Great Financial Crisis (2008-2015). Economic Analysis Letters, 2(3), 30. https://doi.org/10.58567/eal02030004

Article Metrics

Article Access Statistics

References

  1. 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
  2. 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
  3. 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
  4. 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
  5. 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
  6. 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
  7. 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
  8. 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
  9. 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
  10. 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
  11. 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
  12. 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
  13. Corneo, G. (2015). Income inequality from a lifetime perspective. Empirica, 42, 225-239. https://doi.org/10.1007/s10663-015-9283-5
  14. 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
  15. 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
  16. Cowell, F. (2011). Measuring inequality. Oxford: Oxford University Press. https://doi.org/10.1093/acprof:osobl/9780199594030.001.0001
  17. 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
  18. Fields, G. & Ok, E. (1999). Measuring Movement of Income. Economica, 66, 455–471. https://www.jstor.org/stable/2555171
  19. 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
  20. 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
  21. 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
  22. 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
  23. 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
  24. 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
  25. 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
  26. 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
  27. 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
  28. 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
  29. Piketty, T. (2014). Capital in the Twenty-First Century, Cambridge, MA: Harvard, University Press. https://www.hup.harvard.edu/catalog.php?isbn=9780674430006
  30. Ricardo, D. (1821). On Principles of Political Economy and Taxation, third ed. Kitchner: Batoche Books (2001). https://econpapers.repec.org/bookchap/hayhetboo/ricardo1821.htm
  31. 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
  32. Rydliński, B. (2017). Economic Crisis as a Factor of the Neoliberal Policy in Poland. Prakseologia, 159, 39-62. https://ifispan.pl/shop/prakseologia-1592017/
  33. 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
  34. 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
  35. 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
  36. 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
  37. 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
  38. 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