Centre for Economic Analysis

Working Paper 02/16

Distributional consequences of tax and benefit policies in Poland: 2005-2014.

Michał Myck, Mateusz Najsztub

Abstract:

We examine the dynamics of disposable incomes and their specific components in Poland between 2005 and 2014 using data from the Polish Household Budget Surveys. We focus in particular on changes in the distribution of earnings and pensions and examine why at the time of rapid economic growth which Poland experienced at the time income inequality has remained relatively stable. Fiscal reforms implemented during this period are analysed from the point of view of the changing distributional implications of the tax and benefit system. Finally, we decompose changes in inequality of disposable incomes to identify the role of tax and benefit policies and separate it from other factors affecting incomes at the time. We find that 44% of the 0.7pp reduction in the Gini coefficient between 2005-2014 can be associated with tax and benefit reforms.

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