6. Social Benefits Versus Monetary and Multidimensional Poverty in Poland: Imputed Income Exercise

In this study, an effect of the social benefits on monetary and multidimensional poverty in Poland is examined. The effect is evaluated by means of comparisons between actual and simulated poverty indices. The latter ones are based on incomes diminished by sums of the benefits. One of the main problems in research utilizing incomes derived from household surveys is the data quality, especially in extreme ranges of distributions. To cope this problems, the declared incomes are supplemented by imputed ones, estimated using the so-called hierarchical correlation reconstruction (HCR). This method allows estimation of the entire conditional income distribution on household welfare correlates. The poverty indices using both types of incomes differ substantially, especially for poverty depth, and those using imputed incomes seem to be more reliable. Supplementary, a strong demotivation effect of the benefits is obtained.