Household Income Inequality in Poland from 2005 to 2013 – A Decomposition of the Gini Coefficient by Socio-Economic Groups
Household Income Inequality in Poland from 2005 to 2013 – A Decomposition of the Gini Coefficient by Socio-Economic Groups

Summary/Abstract: The aim of this study is the empirical analysis of the Gini coefficient decomposition by socio-economic groups in Poland from 2005 to 2013. The analysis was based on non-identifiable, individual household budget surveys data collected by Poland’s Central Statistical Office. For the purpose of this study income was defined as equivalized household disposable income, i.e. the unit of analysis is a household and household disposable income was adjusted using the OECD modified equivalence scale. The Gini coefficient decomposition by socio-economic groups revealed that the residual term measuring the extent to which overall inequality is attributable to overlapping income distributions of individual socio-economic groups contributed to the greatest extent to overall income inequality in Poland during the analyzed period. The second most important factor explaining income inequality was the component of inequality within socio-economic groups. Income inequality between socio-economic groups contributed about 28–30% to overall income inequality in Poland from 2015 to 2015.The Gini decomposition results allow to conclude, that the structure of the contribution of individual socio-economic groups in Poland was the following. Employees’ households were the group with the largest, increasing contribution of weighted income variability to overall income disparities. The second group that was explaining total income disparities to the greatest extent regarding within-inequality were old-age pensioners. The remaining socio-economic groups had only a marginal impact in this regard in Poland from 2005 to 2013.

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