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

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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Article provided by Narodowy Bank Polski 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;

Find related papers by JEL classification:

  • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
  • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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  1. 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.
  2. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9781107001411, November.
  3. Michael Roos, "undated". "Wages and Market Potential in Germany," Discussion Papers in Economics 00_09, University of Dortmund, Department of Economics.
  4. 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.
  5. 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.
  6. Stephen J. Redding, 2010. "The Empirics Of New Economic Geography," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 297-311.
  7. Steven Brakman & Harry Garretsen & Marc Schramm, 2004. "The Spatial Distribution of Wages: Estimating the Helpman-Hanson Model for Germany," Journal of Regional Science, Wiley Blackwell, vol. 44(3), pages 437-466.
  8. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
  9. H. Hanson, Gordon, 2005. "Market potential, increasing returns and geographic concentration," Journal of International Economics, Elsevier, vol. 67(1), pages 1-24, September.
  10. 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.
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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.
  2. Andrzej Cieslik & Bartlomiej Rokicki, 2013. "Regional Structure Of Wages In Poland Over The Period 1995-2009," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 8(3), pages 65-78, September.

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