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Individual Pay and Outside Options: Evidence from the Polish Labour Force Survey

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Author Info
Duffy, Fiona (Department of Economics, Trinity College, Dublin)
Walsh, Patrick Paul () (Department of Economics, Trinity College, Dublin and IZA, Bonn)

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Abstract

Using Polish Labour Force Survey data, we examine whether competition for labour has induced individual pay to depend on outside options, availability and quality of jobs. Exploiting the lack of inter-regional job and worker flows we estimate the elasticity of individual pay, amongst a rich set of individual characteristics, to be approximately -0.1 for local unemployment (job shortages) and + 0.1 for local job reallocation (restructuring). Variations in local labour market conditions explain approximately 50 per cent of the differences in expected individual earnings across regions, while differences in inherited human capital and occupation structures explain the rest.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 295.

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Length: 45 pages
Date of creation: May 2001
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Handle: RePEc:iza:izadps:dp295

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Related research
Keywords: Wage determination; unemployment; job reallocation and polish regions;

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Find related papers by JEL classification:
J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies
L0 - Industrial Organization - - General
O5 - Economic Development, Technological Change, and Growth - - Economywide Country Studies

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Repkine, Alexandre & Walsh, Patrick Paul, 1999. "Evidence of European Trade and Investment U-Shaping Industrial Output in Bulgaria, Hungary, Poland, and Romania," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 730-752, December. [Downloadable!] (restricted)
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    Other versions:
  5. Alan B. Krueger & Jorn-Steffen Pischke, 1992. "A Comparative Analysis of East and West German Labor Markets: Before and After Unification," NBER Working Papers 4154, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. Patrick Paul Walsh, 2000. "Regional Unemployment in Poland: A Legacy of Central Planning," LICOS Discussion Papers 9100, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  7. Swati Basu & Saul Estrin & Jan Svejnar, 1997. "Employment and wage behaviour of industrial enterprises in transition economies: The cases of Poland and Czechoslovakia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 5(2), pages 271-287, November. [Downloadable!] (restricted)
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    Other versions:
  14. Freeman, Richard B, 1988. "Evaluating the European View that the United States Has No Unemployment Problem," American Economic Review, American Economic Association, vol. 78(2), pages 294-99, May. [Downloadable!] (restricted)
  15. Jozef Konings & Patrick Walsh, 2000. "The Impact of Product Market Competition on Employment Determination in Unionised and Non-Unionised Firms: Firm Level Evidence for the U.K," Review of Industrial Organization, Springer, vol. 17(4), pages 385-394, December. [Downloadable!] (restricted)
  16. Tito Boeri, 1999. "Transition with Labour Supply," William Davidson Institute Working Papers Series 274, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
    Other versions:
  17. Konings, Jozef & Walsh, Patrick P, 1994. "Evidence of Efficiency Wage Payments in UK Firm Level Panel Data," Economic Journal, Royal Economic Society, vol. 104(424), pages 542-55, May. [Downloadable!] (restricted)
    Other versions:
  18. Aghion, P. & Blanchard, O.J., 1993. "On the Speed of Transition in Central Europe," Working papers 93-8, Massachusetts Institute of Technology (MIT), Department of Economics.
    Other versions:
  19. Boeri, Tito & Scarpetta, Stefano, 1996. "Regional mismatch and the transition to a market economy," Labour Economics, Elsevier, vol. 3(3), pages 233-254, October. [Downloadable!] (restricted)
  20. Reza, Ali M, 1978. "Geographical Differences in Earnings and Unemployment Rates," The Review of Economics and Statistics, MIT Press, vol. 60(2), pages 201-08, May. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Anna Iara & Iulia Traistaru, 2004. "How Flexible are Wages in EU Accession Countries?," ERSA conference papers ersa04p191, European Regional Science Association. [Downloadable!]
    Other versions:
  2. Tomasz Mickiewicz & Kate Bishop, 2003. "Wage Determination: Privatised, New Private And State Owned Companies. Empirical Evidence From Panel Data," William Davidson Institute Working Papers Series 584, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  3. Michael Landesmann & Hermine Vidovic & Vladimir Gligorov & Robert Stehrer & Anna Iara, 2008. "Western Balkan Countries: Adjustment Capacity to External Shocks, with a Focus on Labour Markets," Research Reports 352, The Vienna Institute for International Economic Studies, wiiw. [Downloadable!]
  4. David G. Blanchflower & Andrew J. Oswald, 2005. "The Wage Curve Reloaded," IZA Discussion Papers 1665, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  5. Erik Berglof & Patrick Bolton, 2001. "The Great Divide and Beyond: Financial Architecture in Transition," William Davidson Institute Working Papers Series 414, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  6. Anna Maria Ferragina & Francesco Pastore, 2005. "Mind the Gap: Unemployment in the New EU Regions," IZA Discussion Papers 1565, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  7. Berglöf, Erik & Bolton, Patrick, 2003. "The Great Divide and Beyond - Financial Architecture in Transition," CEPR Discussion Papers 3476, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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