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The Polish Wage Inequality Explosion

Author

Listed:
  • Newell, Andrew T.

    (University of Sussex)

  • Socha, Mieczyslaw

    (Warsaw University)

Abstract

This paper presents and analyses the sharp increase in hourly wage inequality after 1998 in Poland. The increase was similar in magnitude to the much-studied increase in British wage inequality during the 1980s. Using data from the Polish Labour Force Survey, we find this increase to be associated with rising wage differentials and within-group variances at both the upper and lower ends of the wage distribution. These increases are associated with differences in wage-setting patterns between the public and private sector as well in the rapid increase in the demand for educated labour. One important difference between the sectors is the lack of an impact of local labour market conditions, or wage curve, clearly evident in private sector wages, on public sector wages.

Suggested Citation

  • Newell, Andrew T. & Socha, Mieczyslaw, 2007. "The Polish Wage Inequality Explosion," IZA Discussion Papers 2644, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2644
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    References listed on IDEAS

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    1. Branko Milanovic, 1999. "Explaining the increase in inequality during transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(2), pages 299-341, July.
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    Keywords

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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