INCOME INEQUALITY OF RURAL HOUSEHOLDS IN POLAND – ANALYSIS BY SOURCE OF INCOME

Abstract

Rural households live on income much lower than the national average and experience income inequality much higher than the general population. This excess inequality is primarily due to the internal heterogeneity caused by the different nature of household income sources. The purpose of the study was then to assess the level of rural household income inequality and to decompose the inequality index by the main sources of income. The chosen inequality index was Theil-T. The research drew on unidentifiable microdata from the Household Budget Survey conducted by the CSO in 2019-2021.The study found that rural household inequality was slightly higher than that of all Polish households over the analyzed period. Among the various income-source groups, the highest inequality affected farmer households. This group also contributed most to the overall level of inequality in rural areas (44% in 2019 and over 46% in 2021). The pandemic saw an increase in inequality for all identified groups of rural households (the largest – for farmer households) and a decrease in between-group inequality.

Keywords

• income inequality
• Theil-T index
• Theil-T decomposition
• household income sources
• rural households