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The Impact of Family and Child-Allowances on Income Inequality in Poland. Gini Decomposition by Income Sources

Author

Listed:
  • Wędrowska Ewa

    (Department of Economic Applications of Informatics and Mathematics, Nicolaus Copernicus University, Faculty of Economic Sciences and Management, Gagarina 13a, 87-100 Toruń, Poland)

  • Muszyńska Joanna

    (Department of Econometrics and Statistics, Nicolaus Copernicus University, Faculty of Economic Sciences and Management, Gagarina 13a, 87-100 Toruń, Poland)

Abstract

Research background: This paper analyses how different income sources affect the level of inequality in Poland, with focus on the role of family and children related allowances in decreasing income inequalities in 2015–2017. Therefore, the study has focused on the various subgroups of households with children. Purpose: The paper is aimed at examining the extent to which family and children related allowances affect household income inequality and identifying whether they affect inequality in various groups of households in the same way. Methodology: The study was carried out on micro-data gathered by Eurostat. To examine the extent to which different income components affect income inequality, we decompose the Gini coefficient according to the method introduced by Lerman and Yitzhaki. Results: Our study revealed that for most households with children, the inequality-reducing effect due to family and children related allowances increased in 2017 compared to 2015. However, despite the additional child-raising benefit under the “Family 500+” programme, income taxes and social security contributions remained by far the most important factor in reducing household income inequalities in Poland. Novelty: To our knowledge, no study has yet attempted to assess the extent to which family and child-allowances affect income inequality based on real data. The present analysis takes a step towards filling this gap. Unlike other studies based on microsimulation, in this paper we made use of the representative micro-data derived from the EU-SILC study.

Suggested Citation

  • Wędrowska Ewa & Muszyńska Joanna, 2021. "The Impact of Family and Child-Allowances on Income Inequality in Poland. Gini Decomposition by Income Sources," Folia Oeconomica Stetinensia, Sciendo, vol. 21(1), pages 144-160, June.
    • Handle: RePEc:vrs:foeste:v:21:y:2021:i:1:p:144-160:n:1
    DOI: 10.2478/foli-2021-0010
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    References listed on IDEAS

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    3. Brzezinski, Michal & Najsztub, Mateusz, 2021. "The impact of "Family 500+" programme on household incomes, poverty and inequality," SocArXiv vkr6h, Center for Open Science.
    4. Shlomo Yitzhaki & Edna Schechtman, 2005. "The properties of the extended Gini measures of variability and inequality," Metron - International Journal of Statistics, Dipartimento di Statistica, Probabilità e Statistiche Applicate - University of Rome, vol. 0(3), pages 401-433.
    5. Wodon, Quentin & Yitzhaki, Shlomo, 2002. "Inequality and Social Welfare," MPRA Paper 12298, University Library of Munich, Germany.
    6. Albert Chevan & Randall Stokes, 2000. "Growth in family income inequality, 1970–1990: Industrial restructuring and demographic change," Demography, Springer;Population Association of America (PAA), vol. 37(3), pages 365-380, August.
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    8. Michał Myck & Kajetan Trzciński, 2019. "From Partial to Full Universality: The Family 500+ Programme in Poland and its Labor Supply Implications," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 17(03), pages 36-44, October.
    9. Molly Martin, 2006. "Family structure and income inequality in families with children, 1976 to 2000," Demography, Springer;Population Association of America (PAA), vol. 43(3), pages 421-445, August.
    10. Hemerijck, Anton, 2012. "Changing Welfare States," OUP Catalogue, Oxford University Press, number 9780199607600, Decembrie.
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    More about this item

    Keywords

    household income; income inequality; Gini coefficient; income source decomposition; EU-SILC;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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