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Consumption and Income Inequality During the Transition to a Market Economy: Poland, 1985–1992

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  • Keane, Michael
  • Prasad, Eswar

Abstract

This paper challenges the conventional wisdom that income and consumption inequality in Poland increased substantially following the economic transition in 1989–90. Using microdata from the 1985–92 Household Budget Surveys, we find that overall income inequality increased in 1989 but subsequently declined to pretransition levels. The distribution of consumption reveals a similar pattern. Social transfers are shown to have played an important role in mitigating increases in overall income inequality during the transition. However, the relative well-being of different socioeconomic groups was altered and, despite the reasonably good targeting of transfers, there were clear winners and losers in the transition process.

Suggested Citation

  • Keane, Michael & Prasad, Eswar, 2001. "Consumption and Income Inequality During the Transition to a Market Economy: Poland, 1985–1992," MPRA Paper 54356, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:54356
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    File URL: https://mpra.ub.uni-muenchen.de/54356/9/MPRA_paper_54356.pdf
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    References listed on IDEAS

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    Cited by:

    1. Guanghua Wan, 2002. "Income Inequality and Growth in Transition Economies: Are Nonlinear Models Needed?," WIDER Working Paper Series DP2002-104, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    Transition Economies; Poland; Inequality; Social Transfers; Income Distribution;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies

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