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Employment Fluctuations and Dynamics of the Aggregate Average Wage in Poland 1996-2003

Author

Listed:
  • Myck, Michal

    () (Centre for Economic Analysis, CenEA)

  • Morawski, Leszek

    () (Warsaw University)

  • Mycielski, Jerzy

    () (Warsaw University)

Abstract

The aggregate average wage is often used as an indicator of economic performance and welfare, and as such often serves as a benchmark for changes in the generosity of public transfers and for wage negotiations. Yet if economies experience a high degree of (nonrandom) fluctuation in employment the composition of the employed population will have a considerable effect on the computed average. In this paper we demonstrate the extent of this problem using data for Poland for the period 1996-2003. During these years employment in Poland fell from 51.2% to 44.2% and most of it occurred between the end of 1998 and the end of 2002. We show that about a quarter of the growth in the average wage during this period could be attributed purely to changes in employment.

Suggested Citation

  • Myck, Michal & Morawski, Leszek & Mycielski, Jerzy, 2006. "Employment Fluctuations and Dynamics of the Aggregate Average Wage in Poland 1996-2003," IZA Discussion Papers 2456, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2456
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    References listed on IDEAS

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    1. Richard Blundell & Howard Reed & Thomas M. Stoker, 2003. "Interpreting Aggregate Wage Growth: The Role of Labor Market Participation," American Economic Review, American Economic Association, vol. 93(4), pages 1114-1131, September.
    2. Gary Solon & Robert Barsky & Jonathan A. Parker, 1994. "Measuring the Cyclicality of Real Wages: How Important is Composition Bias?," The Quarterly Journal of Economics, Oxford University Press, vol. 109(1), pages 1-25.
    3. Meghir, Costas & Whitehouse, Edward, 1996. "The Evolution of Wages in the United Kingdom: Evidence from Micro Data," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 1-25, January.
    4. Amanda Gosling & Stephen Machin & Costas Meghir, 2000. "The Changing Distribution of Male Wages in the U.K," Review of Economic Studies, Oxford University Press, vol. 67(4), pages 635-666.
    5. Bils, Mark J, 1985. "Real Wages over the Business Cycle: Evidence from Panel Data," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 666-689, August.
    6. Heckman, James J & Sedlacek, Guilherme L, 1990. "Self-selection and the Distribution of Hourly Wages," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 329-363, January.
    7. Richard Blundell & Howard Reed & Thomas M. Stoker, 1999. "Interpreting aggregate wage growth," IFS Working Papers W99/13, Institute for Fiscal Studies.
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    Citations

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    Cited by:

    1. Paweł Strawiński, 2009. "Ins and Outs of Polish Unemployment," Central European Journal of Economic Modelling and Econometrics, CEJEME, vol. 1(3), pages 243-259, November.
    2. Aleksandra Majchrowska & Paweł Strawiński, 2016. "Regional Differences in Gender Wage Gaps in Poland: New Estimates Based on Harmonized Data for Wages," Central European Journal of Economic Modelling and Econometrics, CEJEME, vol. 8(2), pages 115-141, June.
    3. Jacek Wallusch, 2010. "Poland: Minimum Wage, Employment and Labour Migration," Chapters,in: The Minimum Wage Revisited in the Enlarged EU, chapter 11 Edward Elgar Publishing.
    4. Costas Christou, 2013. "The dynamics of wage determination in Romania," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 21(4), pages 713-729, October.
    5. Maciej Bukowski & Grzegorz Koloch & Piotr Lewandowski, 2008. "Shocks and rigidities as determinants of the CEE labor markets’ performance - a panel SVECM approach -," IBS Working Papers 2/2008, Instytut Badan Strukturalnych.
    6. Maciej Bukowski & Grzegorz Koloch & Piotr Lewandowski, 2013. "Shocks and rigidities as determinants of CEE labour markets’ performance," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 21(3), pages 553-581, July.

    More about this item

    Keywords

    transition economies; wage distribution; aggregation; employment dynamics;

    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
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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