Between Communism and Capitalism: Long-term Inequality in Poland, 1892-2015

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This paper looks at the evolution of inequality in Poland from the late 19th Century to the early 21st Century, by constructing the long-term distribution of income in Poland from combining tax, household survey and national accounts data.

It documents a U-shaped evolution of inequalities from the end of the 19th century until today: (i) inequality was high before WWII; (ii) abruptly fell after the introduction of communism in 1947 and stagnated at low levels during the whole communist period; (iii) experienced a sharp rise with the return to capitalism in 1989.

The authors find that official survey-based measures strongly under-estimate the rise of inequality since 1989, and that frequently quoted Poland’s transition success has largely benefited top income groups. Within one generation, Poland has transformed from being one of the most egalitarian countries in Europe to one of the most unequal.

Overall, the unique Polish inequality history speaks about the central role of policies and institutions in shaping inequality in the long run.