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Changes in the Structure of Earnings During the Polish Transition

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  • Mr. Eswar S Prasad
  • Mr. Michael P. Keane

Abstract

This paper documents that inequality in labor earnings increased substantially during the economic transition in Poland. One surprising result is that earnings inequality increased markedly in both the private and public sectors, indicating that even state-owned enterprises in Poland moved toward competitive wage setting during the transition. Education premia increased sharply, while experience premia declined. Increases in within-group inequality account for about 60 percent of the increase in overall wage inequality. But, contrary to the experience of countries like the United States, increases in within-group inequality in Poland were very different across skill groups, with much larger increases for highly educated workers.

Suggested Citation

  • Mr. Eswar S Prasad & Mr. Michael P. Keane, 2002. "Changes in the Structure of Earnings During the Polish Transition," IMF Working Papers 2002/135, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:2002/135
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    More about this item

    Keywords

    WP; earnings inequality; earnings; private sector; worker; Wage inequality; between- and within-group inequality; education and experience premia; labor reallocation; transition; earnings distribution; distribution survey; September earnings survey data; earnings differential; gender earnings gap; earnings premium; earnings regression; sector earnings dispersion; Wages; Income inequality; Public sector; Eastern Europe;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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