The emerging aversion to inequality - Evidence from long subjective data

Abstract

This paper provides evidence of a change in the relationship between individual satisfaction with the state of country's economy and income inequality during transition from a command to market economic system. Using data from a series of extensive and frequent surveys of Polish population, we identify a structural break in this relationship. In the beginning of transition, an increase in income inequality is interpreted by population as a positive signal of increased opportunities; this sentiment is particularly strong among older people and people with right-wing political views. Later in the transition period, increased inequality becomes an important reason for dissatisfaction of the public with the country's economic situation and reforms, as people become more skeptical about the legitimacy of income generation process. We also provide direct evidence from opinion polls of a change in the public sentiment about income inequality.