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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 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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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. H. Hanson, Gordon, 2005. "Market potential, increasing returns and geographic concentration," Journal of International Economics, Elsevier, vol. 67(1), pages 1-24, September.
  2. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9780521171960, November.
  3. 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.
  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. 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.
  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. S. Brakman & H Garretsen & M. Schramm, 2004. "The Spatial Distribution of Wages:Estimating the Helpman-Hanson model for Germany," Working Papers 03-09, Utrecht School of Economics.
  8. Michael Roos, . "Wages and Market Potential in Germany," Discussion Papers in Economics 00_09, University of Dortmund, Department of Economics.
  9. Redding, Stephen J., 2009. "The Empirics of New Economic Geography," CEPR Discussion Papers 7307, C.E.P.R. Discussion Papers.
  10. Harry H. Kelejian & Ingmar R. Prucha, 2008. "Specification and Estimation of Spatial Autoregressive Models with Autoregressive and Heteroskedastic Disturbances," CESifo Working Paper Series 2448, CESifo Group Munich.
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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.

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