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The Polish Wage Inequality Explosion

  • Newell, Andrew T.


    (University of Sussex)

  • Socha, Mieczyslaw


    (Warsaw University)

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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2644.

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Length: 26 pages
Date of creation: Feb 2007
Date of revision:
Publication status: published in: Economics of Transition, 2007, 15 (4), 733-758
Handle: RePEc:iza:izadps:dp2644
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  1. Oi, Walter Y. & Idson, Todd L., 1999. "Firm size and wages," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 33, pages 2165-2214 Elsevier.
  2. Andrew Newell & Barry Reilly, 2000. "The Gender Pay Gap in the Transition from Communism: Some Empirical Evidence," William Davidson Institute Working Papers Series 305, William Davidson Institute at the University of Michigan.
  3. Keane, Michael P. & Prasad, Eswar, 2002. "Changes in the Structure of Earnings During the Polish Transition," IZA Discussion Papers 496, Institute for the Study of Labor (IZA).
  4. Roger Koenker & Kevin F. Hallock, 2001. "Quantile Regression," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 143-156, Fall.
  5. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492 National Bureau of Economic Research, Inc.
  6. Richard B. Freeman, 1981. "Union Wage Practices and Wage Dispersion within Establishments," NBER Working Papers 0752, National Bureau of Economic Research, Inc.
  7. 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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