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Increased Sorting and wage Inequality in the Czech Republic: New Evidence Using Linked Employer-Employee Dataset

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Author Info

  • Eriksson, Tor

    ()
    (Department of Economics, Aarhus School of Business)

  • Pytliková, Mariola

    ()
    (Department of Economics, Aarhus School of Business)

  • Warzynski, Frederic

    ()
    (Department of Economics, Aarhus School of Business)

Abstract

In this paper, we look at the evolution of firms’ wage structures using a linked employeremployee dataset, which has longitudinal information for firms and covers a large fraction of the Czech labor market during the period 1998-2006. We first look at the evolution of individual wage determination and find evidence of slightly increasing returns to human capital and diminishing gender inequality. We then document sharp increases in both within-firm and between-firm inequality. We investigate various hypotheses to explain these patterns: increased domestic and international competition, an increasingly decentralized wage bargaining, skill biased technological change and a changing educational composition of the workforce. We find some support for that all these factors have contributed to the changes in the Czech wage structure, and that increased sorting is strongly associated with the observed changes in wage inequality.

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File URL: http://www.hha.dk/nat/wper/09-5_tormarpfwa.pdf
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Bibliographic Info

Paper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 09-5.

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Length: 48 pages
Date of creation: 01 Feb 2009
Date of revision:
Handle: RePEc:hhs:aareco:2009_005

Note: Published as: Eriksson, T., Pytlikova, M. and F. Warzynski (2013): "Increased Sorting and Wage Inequality in the Czech Republic: New Evidence Using Linked Employer-Employee Dataset." Economics of Transition (IF: 0.679), Vol. 21, Issue 2, pp. 357-380. DOI: 10.1111/ecot.12014.
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Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/departments/nat.aspx
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Related research

Keywords: sorting; wage inequality; linked employer-employee dataset; firm panel data; Czech Republic;

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Cited by:
  1. Pierpaolo Parrotta & Dario Pozzoli & Mariola Pytlikova, 2011. "Does Labor Diversity affect Firm Productivity?," Norface Discussion Paper Series 2011022, Norface Research Programme on Migration, Department of Economics, University College London.
  2. Kamil DYBCZAK & Kamil GALUSCAK, 2013. "Changes in the Czech Wage Structure: Does Immigration Matter?," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 63(2), pages 108-128, May.

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