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Wage Inequality on the Hungarian Labour Market: Technological Change, Expansion in Higher Education and the Role of the Minimum Wage

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  • Álmos Telegdy

    (Magyar Nemzeti Bank)

Abstract

The paper examines the development of wage inequality in Hungary between 1995 and 2016, based on the theories that explain the labour market impact of information and communication technologies (ICT). The analysis is based on the Hungarian Wage Survey Database and uses the empirical methods in the literature to calculate the change of the employment shares and wages of various jobs. As in most countries, the Hungarian labour market became polarized, but this has not been accompanied with wage polarization. Rather, the increase of wages was inversely proportional with skill. The paper proposes two reasons for this behaviour: one is the large increase in the minimum wage, while the other the educational expansion which increased the labour supply of highly skilled workers.

Suggested Citation

  • Álmos Telegdy, 2018. "Wage Inequality on the Hungarian Labour Market: Technological Change, Expansion in Higher Education and the Role of the Minimum Wage," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 17(3), pages 5-28.
    • Handle: RePEc:mnb:finrev:v:17:y:2018:i:3:p:5-28
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    wage inequality; wage dynamics; labour market polarisation;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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