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

Michael Keane () and Eswar Prasad ()

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Transition Economies; Poland; Inequality; Social Transfers; Income Distribution (search for similar items in EconPapers)
JEL-codes: D31 J31 O15 P2 (search for similar items in EconPapers)
Date: 2001
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Published in IMF Staff Papers Special Issue, IMF Annual Research Conference 2001.47(2001): pp. 121-154

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