Trade Protection and Industry Wage Structure in Poland
AbstractThis study examines the impact of Poland’s trade liberalization 1994-2001 on the industry wage structure. The liberalization was undertaken in preparation for Poland’s accession to the European Union and was more pronounced in industries with larger shares of unskilled labour. Our analysis indicates that a decrease in an industry tariff was associated with higher wages being earned by workers employed in the industry, controlling for worker characteristics and geographic variables. The result is robust to including year and industry fixed effects, controlling for industry-level exports, imports, concentration, stock of foreign direct investment and capital accumulation. The finding is consistent with liberalization increasing competitive pressures, forcing firms to restructure and improve their productivity, which in turn translates into higher profits being shared with workers. It could also be potentially attributed to trade liberalization lowering the costs of imported inputs, which enhances firm profitability. The result holds when skilled workers are excluded from the sample, thus suggesting that reductions in trade barriers benefited the unskilled in terms of an increase in wages.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4929.
Date of creation: Feb 2005
Date of revision:
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Other versions of this item:
- Chor-ching Goh & Beata S. Javorcik, 2007. "Trade Protection and Industry Wage Structure in Poland," NBER Chapters, in: Globalization and Poverty, pages 337-372 National Bureau of Economic Research, Inc.
- Chor-ching Goh & Javorcik, Beata S., 2005. "Trade protection and industry wage structure in Poland," Policy Research Working Paper Series 3552, The World Bank.
- Chor-ching Goh & Beata Smarzynska Javorcik, 2005. "Trade Protection and Industry Wage Structure in Poland," NBER Working Papers 11143, National Bureau of Economic Research, Inc.
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-06-14 (All new papers)
- NEP-EEC-2005-06-14 (European Economics)
- NEP-INT-2005-06-14 (International Trade)
- NEP-TRA-2005-06-14 (Transition Economics)
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