Abstract:

The aim of the paper is to assess the impact of various income sources on the level of inequality in Poland. Particular attention was paid to the role of social transfers and taxes in levelling income inequalities. The study refers to household disposable incomes from 2015-2016 and was carried out on the EU-SILC data. 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. As our results have shown, in 2016 compared to 2015, income inequality decreased in the groups of households with children, while in the groups of households without children increased. Taxes and social transfers, except old-age and survivor’s benefits, reduced income inequality regardless of the household group. However, it was income taxes and social security contributions that were by far the most important factor in reducing income inequalities. Our study also revealed that in the group of single person with dependent children, the share of family and children related allowances in disposable income has increased, while their inequality-reducing effect has decreased.