Income Disparities in Poland And Why They Are Widening
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Publish date: 2012-08-31
Gospodarka Narodowa 2012;257(7-8):85–116
The article examines the scope of income disparities in Poland during the country’s transition from central planning to a market economy, in comparison with other European Union economies. The author also discusses the multiple determinants of the level of income inequalities and the economic effects of this diversification. To achieve this goal, the author uses statistics from Poland’s Central Statistical Office (GUS) and the EU statistics office, Eurostat. Krajewska also uses the results of Polish empirical studies on income diversification. Wherever data is available, problems related to Poland are analyzed in comparison with statistical data for other EU economies. The market reforms in Poland have led to an increase in income disparities measured with the Gini coefficient, the poverty rate, and the at-risk-of-poverty rate, the author notes. As the country’s socioeconomic system changed, remuneration, employment and tax policies contributed to the growth of income inequalities. Other factors contributing to the increase in income inequalities included a weakening in the redistributive functions of public spending and corporate social services. Further reasons for the deepening of inequalities can be looked for in the way in which state-owned enterprises have been privatized and in the expansion of the shadow economy and corruption. The article ends with a conclusion that Poland’s membership of the European Union and the current crisis should encourage decision makers to adjust economic and social policies and take prompt action to reduce income inequalities in the country.