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Population aging as a factor limiting the revenue potential of local government units. A case study of gminas in Poland1 Cover

Population aging as a factor limiting the revenue potential of local government units. A case study of gminas in Poland1

Open Access
|Feb 2025

Abstract

The purpose of the study is to determine the impact of demographic changes (depopulation, population aging) occurring in Polish local government units (LGUs), identified in this article with gminas (municipalities), on their revenue potential. The authors analyzed the sources of the own revenue of LGUs dependent on the analyzed demographic phenomena and their importance in the formation of revenue potential. In order to capture these dependencies, the authors used correspondence analysis, which is a multivariate statistical technique whose main aim is to reveal the relative relationships between two or more groups of variables, based on data given in a contingency table. The survey covered all LGUs in Poland, divided into basic LGUs and cities with county rights (acting as both units and counties) for the years 2011 and 2021. For the purpose of the analysis, data from the Local Data Bank of Statistics Poland were used. Among the most fiscally efficient sources of LGUs’ own revenue in Poland, it is the share of personal income tax (PIT) that most influences the formation of their revenue potential. The analysis shows that, depending on the number and age structure of the population, it is also the most dependent source of revenue for LGUs in Poland. While this dependence is in line with previous studies, the analysis also revealed a dependence of property tax revenue on the proportion of older people in the population. The progressive process of depopulation and population aging will therefore limit the revenue potential of these budget units. Moreover, the problem of limiting the analyzed potential will be significantly differentiated territorially, as the aging of the population is unevenly spread across the units.

DOI: https://doi.org/10.2478/ijme-2024-0036 | Journal eISSN: 2543-5361 | Journal ISSN: 2299-9701
Language: English
Page range: 146 - 157
Submitted on: Feb 27, 2024
Accepted on: Aug 26, 2024
Published on: Feb 18, 2025
Published by: Warsaw School of Economics
In partnership with: Paradigm Publishing Services
Publication frequency: 4 issues per year

© 2025 Marcin Szymkowiak, Dorota Wyszkowska, published by Warsaw School of Economics
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.