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Wage Differences in Poland at the County Level and their Determinants

Author

Listed:
  • Luśtyk Agata

    (Jagiellonian University in Kraków, Doctoral School in the Social Sciences, Rynek Główny 34, 31-010 Cracow, Poland)

  • Połeć Anna

    (Jagiellonian University in Kraków, Doctoral School in the Social Sciences, Rynek Główny 34, 31-010 Cracow, Poland)

  • Voznyuk Inna

    (Jagiellonian University in Kraków, Faculty of International and Political Studies, Władysława Reymonta 4, 30-059 Cracow)

Abstract

This study investigates the impact of unemployment and labour productivity on relative wages in Polish counties (powiats) from 2008 to 2021. Labour productivity is measured as the ratio of sold industrial production to the number of workers. The data is sourced from the Local Data Bank of Statistics Poland. The analysis employs the Solow model of efficiency wages, the neoclassical Solow model, and the Durbin model of spatial econometrics. The results reveal that both unemployment and labour productivity are statistically significant in explaining relative wages, with unemployment having the strongest, albeit negative, effect during the study period. Notably, changes in unemployment rates or wages in a county influence wage changes in neighbouring counties. The issue of spatial wage differences at the county level in Poland has not been sufficiently explored in recent years. Although recent research has focused on regional (voivodeship-level) wage differences, there remains a gap in understanding wage differences at the county level. Given changes in the Polish labour market, particularly due to the COVID-19 pandemic, this study aims to update previous findings and provide a more detailed analysis.

Suggested Citation

  • Luśtyk Agata & Połeć Anna & Voznyuk Inna, 2024. "Wage Differences in Poland at the County Level and their Determinants," Central European Economic Journal, Sciendo, vol. 11(58), pages 1-14.
    • Handle: RePEc:vrs:ceuecj:v:11:y:2024:i:58:p:14:n:1002
    DOI: 10.2478/ceej-2024-0028
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    References listed on IDEAS

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    1. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    2. Sahling, Leonard G & Smith, Sharon P, 1983. "Regional Wage Differentials: Has the South Risen Again?," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 131-135, February.
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    More about this item

    Keywords

    labour market indicators; Solow model of efficiency wages; neoclassical Solow model; spatial Durbin model;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General

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