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

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 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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  1. Hanson, G.H., 1999. "`Market Potential, Increasing Returns, and Geographic Concentration," Working Papers 439, Research Seminar in International Economics, University of Michigan.
  2. Newell, Andrew T. & Socha, Mieczyslaw, 2007. "The Polish Wage Inequality Explosion," IZA Discussion Papers 2644, Institute for the Study of Labor (IZA).
  3. Fujita, Masahisa & Thisse, Jacques-François, 1996. "Economics of Agglomeration," CEPR Discussion Papers 1344, C.E.P.R. Discussion Papers.
  4. Keith Head & Thierry Mayer, 2005. "Regional Wage and Employment Responses to Market Potential in the EU," Bruges European Economic Research Papers 3, European Economic Studies Department, College of Europe.
  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. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  7. Michael Roos, . "Wages and Market Potential in Germany," Discussion Papers in Economics 00_09, University of Dortmund, Department of Economics.
  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," CESifo Working Paper Series 2658, CESifo Group Munich.
  9. 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.
  10. 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.
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