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Regional wage determinants in Poland: the empirical verification of the NEG approach

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Abstract

The paper aims at explaining the regional wage determinants in Poland using the New Economic Geography approach. We test the hypothesis that regional wages are positively related to the regional economic potential, controlling for individual worker, firm, industry and regional characteristics. We demonstrate that the regional economic potential strongly influences the regional level of wages. Moreover, we find that individual characteristics also play an important role in wage determination in Poland.

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File URL: http://www.bankikredyt.nbp.pl/content/2013/02/bik_02_2013_02_art.pdf
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Bibliographic Info

Article provided by National Bank of Poland, Economic Institute in its journal Bank i Kredyt.

Volume (Year): 44 (2013)
Issue (Month): 2 ()
Pages: 159-174

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Handle: RePEc:nbp:nbpbik:v:44:y:2013:i:2:p:159-174

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Keywords: economic potential; wages;

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  1. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  2. Stephen Redding, 2009. "The empirics of new economic geography," LSE Research Online Documents on Economics 25499, London School of Economics and Political Science, LSE Library.
  3. Head, Keith & Mayer, Thierry, 2006. "Regional wage and employment responses to market potential in the EU," Regional Science and Urban Economics, Elsevier, vol. 36(5), pages 573-594, September.
  4. H Garretsen & M. Schramm & S. Brakman, 2003. "The Strategic Bombing of German Cities during World War II and its Impact for Germany," Working Papers 03-08, Utrecht School of Economics.
  5. Kelejian, Harry H. & Prucha, Ingmar R., 2010. "Specification and estimation of spatial autoregressive models with autoregressive and heteroskedastic disturbances," Journal of Econometrics, Elsevier, vol. 157(1), pages 53-67, July.
  6. Gordon H. Hanson, 1998. "Market Potential, Increasing Returns, and Geographic Concentration," NBER Working Papers 6429, National Bureau of Economic Research, Inc.
  7. Fujita, M. & Thisse, J.-F., . "Economics of agglomeration," CORE Discussion Papers RP -1250, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  8. Steven Brakman & Harry Garretsen & Charles van Marrewijk, 2009. "Economic Geography Within And Between European Nations: The Role Of Market Potential And Density Across Space And Time," Journal of Regional Science, Wiley Blackwell, vol. 49(4), pages 777-800.
  9. Michael Roos, . "Wages and Market Potential in Germany," Discussion Papers in Economics 00_09, University of Dortmund, Department of Economics.
  10. Andrew Newell & Mieczyslaw W. Socha, 2007. "The Polish wage inequality explosion," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 15, pages 733-758, October.
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Cited by:
  1. Mariusz Kaszubowski & Joanna Wolszczak-Derlacz, 2014. "Salary and reservation wage gender gaps in Polish academia," GUT FME Working Paper Series A 19, Faculty of Management and Economics, Gdansk University of Technology.

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