Accounting for recent trends in absolute poverty in Poland: a decomposition analysis

This article uses poverty decompositions to identify factors explaining recent changes in absolute income and consumption poverty in Poland during 1998-2008. Shapley decompositions of poverty changes into growth and redistribution components show that fast economic growth was the main source of a radical fall in absolute poverty after 2005. Distributional changes had a more profound effect on absolute poverty during 1998-2005. Sectoral decompositions of poverty suggest that stagnant wages and pensions as well as growing unemployment were major factors accounting for increasing poverty between 1998 and 2005, while growing diversification of income sources among farmers had a sizable poverty-reducing effect.