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Regional Price Indices and Real Wage Equalization in Poland

In: Geographical Labor Market Imbalances. Recent Explanations and Cures

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  • Bartlomiej Rokicki

    (University of Warsaw)

Abstract

The goal of this chapter is an empirical verification of the hypothesis concerning the real wage equalization among different regions in the case of transition countries. In particular, we focus on Polish NUTS2 regions and for the first time, we apply regional PPP deflators in order to prove whether they may influence the results of the convergence analysis. The issues concerning the evolution of regional labor market disparities within Central and Eastern European countries have been thoroughly discussed in many papers. Still, most of them have focused on the persisting differences in the regional unemployment rates. At the same time, the dispersion of wages across different locations and its evolution over time has been considered as one of the possible factors influencing spatial unemployment rate differentials. Less attention was though paid to the analysis of regional wage equalization process per se. Up to now, the existing studies were based on wage data expressed either in current prices or constant ones but with price deflators calculated at the level of state. Here, we find that the application of regional PPP deflators significantly decreases the overall level of wage disparities across Polish regions (as compared to nominal wages). Nevertheless, it does not significantly change the overall pattern of their evolution. Hence, there is a tendency toward regional real wage divergence rather than equalization.

Suggested Citation

  • Bartlomiej Rokicki, 2015. "Regional Price Indices and Real Wage Equalization in Poland," AIEL Series in Labour Economics, in: Chiara Mussida & Francesco Pastore (ed.), Geographical Labor Market Imbalances. Recent Explanations and Cures, edition 1, chapter 16, pages 17-35, AIEL - Associazione Italiana Economisti del Lavoro.
    • Handle: RePEc:ail:chapts:08-16
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    File URL: http://link.springer.com/chapter/10.1007/978-3-642-55203-8_16
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    Cited by:

    1. Bartlomiej Rokicki & Geoffrey J.D. Hewings, 2017. "The impact of the regional price deflators on regional income convergence in Poland," Bank i Kredyt, Narodowy Bank Polski, vol. 48(6), pages 531-556.
    2. Rokicki, Bartlomiej & Blien, Uwe & Hewings, Geoffrey J.D. & thi Hong Van, Phan, 2021. "Is there a wage curve with regional real wages? An analysis for the US and Poland," Economic Modelling, Elsevier, vol. 102(C).

    More about this item

    Keywords

    PPP; Regional convergence; Spatial unemployment differentials; Poland;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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