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The Distribution of Wages in Transition Countries

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  • Newell, Andrew T.

    () (University of Sussex)

Abstract

This paper seeks to document and analyse changes in the distribution of wages and employment in the transition countries since the collapse of communism. Most countries experienced an increase in wage inequality during the initial shock of the transition. Proximate causes of this increase seem to be sectoral shifts in employment and increasing inter-industry wage differentials. In Eastern Europe, where economic growth has restarted, there have been further increases in income inequality. These changes are arguably the best guide to future trends in the wage distribution. Taking the case of Poland, rising inequality appears to be entirely accounted for by an increased incidence of workless households. This rise in workless households derives from two phenomena: rising participation in post-compulsory education and earlier retirement. Also in Poland, though there is no change in hourly wage inequality, structural change has had clear impacts of the distribution of wages with increased wage premia to education, to growing sectors and geographically advantaged regions in the economy and to senior occupations.

Suggested Citation

  • Newell, Andrew T., 2001. "The Distribution of Wages in Transition Countries," IZA Discussion Papers 267, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp267
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    Cited by:

    1. Maciej Bukowski & Grzegorz Koloch & Piotr Lewandowski & Anna Baranowska & Iga Magda & Arkadiusz Szydlowski & Jacek Bielinski & Magdalena Bober & Malgorzata Sarzalska & Julian Zawistowski, 2008. "Employment in Poland 2007. Security on a Flexible Labour Market," Books and Reports published by IBS, Instytut Badan Strukturalnych, number zwp2007 edited by Maciej Bukowski, january.
    2. Jelena Laušev, 2012. "Public Sector Pay Gap In Serbia During Large-Scale Privatisation,By Educational Qualification," Economic Annals, Faculty of Economics, University of Belgrade, vol. 57(192), pages 7-24, January –.
    3. Francesco Pastore & Alina Verashchagina, 2006. "The Distribution of Wages in Belarus," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 48(2), pages 351-376, June.
    4. Gabriela Grotkowska & Leszek Wincenciak, 2014. "Public sector wage premium in Poland: can it be explained by structural differences in employment?," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 38.
    5. Kecmanovic, Milica, 2012. "Men's wage inequality in Serbia's transition," Economic Systems, Elsevier, vol. 36(1), pages 65-86.
    6. Keane, Michael P. & Prasad, Eswar S., 2006. "Changes in the structure of earnings during the Polish transition," Journal of Development Economics, Elsevier, vol. 80(2), pages 389-427, August.
    7. Ganguli, Ina & Terrell, Katherine, 2006. "Institutions, markets and men's and women's wage inequality: Evidence from Ukraine," Journal of Comparative Economics, Elsevier, vol. 34(2), pages 200-227, June.
    8. Magda, Iga & Rycx, Francois & Tojerow, Ilan & Valsamis, Daphné, 2008. "Wage Differentials across Sectors in Europe: An East-West Comparison," IZA Discussion Papers 3830, Institute for the Study of Labor (IZA).
    9. Hazans, Mihails, 2002. "Social returns to commuting in the Baltic states," ERSA conference papers ersa02p232, European Regional Science Association.
    10. Amy Y.C. Liu, 2005. "Changing wage structure and education in Vietnam 1993-1998: The roles of demand," International and Development Economics Working Papers idec05-4, International and Development Economics.
    11. Mihails Hazans, 2004. "Does Commuting Reduce Wage Disparities?," Growth and Change, Wiley Blackwell, vol. 35(3), pages 360-390.
    12. Hazans, Mihails, 2003. "Commuting in the Baltic States: Patterns, determinants and gains," ZEI Working Papers B 02-2003, University of Bonn, ZEI - Center for European Integration Studies.
    13. Mihails Hazans, 2003. "Returns to Education in the Baltic Countries," SSE Riga/BICEPS Research Papers 2003-1, Baltic International Centre for Economic Policy Studies (BICEPS);Stockholm School of Economics in Riga (SSE Riga).
    14. Mitra, Pradeep & Yemtsov, Ruslan, 2006. "Increasing inequality in transition economies : is there more to come?," Policy Research Working Paper Series 4007, The World Bank.
    15. Puja Vasudeva Dutta, 2005. "Accounting for Wage Inequality in India," PRUS Working Papers 29, Poverty Research Unit at Sussex, University of Sussex.
    16. Hazans, Mihails, 2005. "Unemployment and the earnings structure in Latvia," Policy Research Working Paper Series 3504, The World Bank.

    More about this item

    Keywords

    Wage distribution; inequality; transition; and structural change;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • P2 - Economic Systems - - Socialist Systems and Transition Economies

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