Wealth Inequality in Interwar Poland

Wealth Inequality in Interwar Poland

In this paper, Marcin Wroński provides the first estimates of wealth inequality in Poland in the interwar period.  To estimate wealth inequality, the author uses administrative tabulations from extraordinary wealth tax introduced in 1923.

He finds that the wealth share of the dop decile in Poland was relatively modest in comparison with the rest of interwar Europe. However, the modest wealth share of the top decile coexisted with high very top (0.1%, 0.01%) wealth shares. The small elite of super-rich was very wealthy in comparison to the European peers, but the wealth share of the rest of the top decile was relatively low. The unequal development of former partitions may partially explain high very top wealth shares.

Key Findings

• The bottom 50% of the population controlled only 2.5% of the total wealth. The wealth share of the middle 40% equaled 30.2%. The wealth share of the top decile stood at 67.3%. The top 1% owned 42.5% of the total wealth (measures corrected for tax evasion and tax exemptions). (Table 5)
• Strong regional inequality in top wealth shares existed across the former partitions. Top wealth shares were highest in the former Prussian partition (Figure 5).
• Wealth inequality was higher in more economically developed regions (Figure 7).
• Outside the top 1%, agriculture had the lion’s share in total wealth. At the very top, the structure of wealth differed, most of assets were held in the industry and trade. (Figure 9).

Figure: Wealth Inequality in Poland

This table shows the wealth shares of the top decile in interwar Poland.

Policy Recommendation

Extraordinary wealth taxes may be used to mobilize revenues in extraordinary times. However, public policymakers must address the limited liquidity of taxpayers, which may be a problem. Today, the implementation of extraordinary wealth taxes may be much more efficient than in the interwar period.

CONTACT

Authors

• Marcin Wroński (Collegium of World Economy, SGH Warsaw School of Economics): mwronsk@sgh.waw.pl

Media Inquiries

• Olivia Ronsain: olivia.ronsain@psemail.eu; +33 7 63 91 81 68