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Role of Age and Education as the Determinant of Income Inequality in Poland: Decomposition of the Mean Logarithmic Deviation
[journal article]
Abstract Measures of inequality can be used to illustrate inequality between and within groups, but the choice of the appropriate measure can have different implications. This study focused on the Mean Logarithmic Deviation, the measure proposed by Theil and based on the techniques of statistical information... view more
Measures of inequality can be used to illustrate inequality between and within groups, but the choice of the appropriate measure can have different implications. This study focused on the Mean Logarithmic Deviation, the measure proposed by Theil and based on the techniques of statistical information theory. The MLD was selected because of its attractive properties: fulfillment of the principle of monotonicity and the possibility of additive decomposition. The following study objectives were formulated: (1) to assess the degree of inequality in the population and in the distinguished subgroups, (2) to determine the extent to which education and age influence the level of inequality, and (3) to ascertain what factors contribute to changes in the level of inequality in Poland. The study confirmed an association between the level of education and the average income of the groups distinguished on this basis. The education level of the household head remains an important determinant of household income inequality in Poland, despite the decline in the "educational bonus". The study also found that differences in the age of the household head had a smaller effect on income inequality than the level of education. However, it can be concluded that the higher share of older people may contribute to an increase in income inequality between groups, as the income from pension in Poland is more homogeneous than the income from work in younger groups. Moreover, the current paper seeks to situate Theil’s approach in the context of scholarly writings since 1967.... view less
Keywords
difference in income; old age; Poland; household income; inequality; level of education
Classification
Income Policy, Property Policy, Wage Policy
Sociology of Education
Free Keywords
Mean Logarithmic Deviation; Shannon entropy; decomposition of income inequality; EU-SILC 2005 ; EU-SILC 2019
Document language
English
Publication Year
2022
Page/Pages
p. 1-17
Journal
Entropy, 24 (2022) 6
Issue topic
Entropy-Based Applications in Economics, Finance, and Management
DOI
https://doi.org/10.3390/e24060773
ISSN
1099-4300
Status
Published Version; peer reviewed