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Individual Pay and Outside Options: Evidence from the Polish Labour Force Survey

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  • Duffy, Fiona

    (affiliation not available)

  • Walsh, Patrick Paul

    (University College Dublin)

Abstract

Using Polish Labour Force Survey data, we examine whether competition for labour has induced individual pay to depend on outside options, availability and quality of jobs. Exploiting the lack of inter-regional job and worker flows we estimate the elasticity of individual pay, amongst a rich set of individual characteristics, to be approximately -0.1 for local unemployment (job shortages) and + 0.1 for local job reallocation (restructuring). Variations in local labour market conditions explain approximately 50 per cent of the differences in expected individual earnings across regions, while differences in inherited human capital and occupation structures explain the rest.

Suggested Citation

  • Duffy, Fiona & Walsh, Patrick Paul, 2001. "Individual Pay and Outside Options: Evidence from the Polish Labour Force Survey," IZA Discussion Papers 295, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp295
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    Cited by:

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    2. Zillmer, Sabine, 2003. "Regional Structural Developments in Selected Polish Regions," IRS Working Papers 20, Leibniz Institute for Research on Society and Space (IRS).
    3. Anna Maria Ferragina & Francesco Pastore, 2008. "Mind The Gap: Unemployment In The New Eu Regions," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 73-113, February.
    4. Erik Berglof & Patrick Bolton, 2002. "The Great Divide and Beyond: Financial Architecture in Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 77-100, Winter.
    5. Baltagi, Badi H. & Rokicki, Bartlomiej, 2013. "The Polish Wage Curve: Micro Panel Data Analysis Based on the Polish Labor Force Survey," IZA Discussion Papers 7812, Institute of Labor Economics (IZA).
    6. Tomasz Mickiewicz & Kate Bishop, 2003. "Wage Determination: Privatised, New Private And State Owned Companies. Empirical Evidence From Panel Data," William Davidson Institute Working Papers Series 584, William Davidson Institute at the University of Michigan.
    7. Peter Huber & Iulia Traistaru, 2003. "Regionale Entwicklung und Anpassung des Arbeitsmarktes in Ost-Mitteleuropa," WIFO Monatsberichte (monthly reports), WIFO, vol. 76(11), pages 841-850, November.
    8. David G. Blanchflower & Andrew J. Oswald, 2005. "The Wage Curve Reloaded," NBER Working Papers 11338, National Bureau of Economic Research, Inc.
    9. Janos Kollő & Tomasz Mickiewicz, 2005. "Wage Bargaining, Privatisation, Ability to Pay and Outside Options: Evidence from Hungary," Post-Communist Economies, Taylor & Francis Journals, vol. 17(4), pages 465-483.
    10. Myck, Michal & Nicinska, Anna & Morawski, Leszek, 2009. "Count Your Hours: Returns to Education in Poland," IZA Discussion Papers 4332, Institute of Labor Economics (IZA).
    11. Iara, Anna & Traistaru, Iulia, 2004. "How flexible are wages in EU accession countries?," Labour Economics, Elsevier, vol. 11(4), pages 431-450, August.
    12. Vladimir Gligorov & Anna Iara & Michael Landesmann & Robert Stehrer & Hermine Vidovic, 2008. "Western Balkan Countries: Adjustment Capacity to External Shocks, with a Focus on Labour Markets," wiiw Research Reports 352, The Vienna Institute for International Economic Studies, wiiw.
    13. Tomasz Marek Mickiewicz & Christopher Gerry & Kate Bishop, 2004. "Inherited labour hoarding, insiders and employment growth. Panel data results: Poland, 1996-2002," UCL SSEES Economics and Business working paper series 37, UCL School of Slavonic and East European Studies (SSEES).
    14. Pierella Paci & Erwin R. Tiongson & Mateusz Walewski & Jacek Liwinski & Maria M. Stoilkova, 2007. "Internal Labor Mobility in Central Europe and the Baltic Region," World Bank Publications - Books, The World Bank Group, number 6598, December.
    15. Thiess Büttner & Peter Huber & Anna Iara & Johannes Rincke & Iulia Traistaru, 2004. "AccessLab: Regional Labour Market Adjustments in the Accession Candidate Countries. Materials No 1," WIFO Studies, WIFO, number 25284, June.
    16. Baltagi, Badi H. & Rokicki, Bartlomiej, 2014. "The spatial Polish wage curve with gender effects: Evidence from the Polish Labor Survey," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 36-47.
    17. Thiess Büttner & Vera Gács & Peter Huber & Anna Iara & Iulia Traistaru & Guntram Wolff, 2003. "Adjustment Capability of Regional Labour Markets," WIFO Studies, WIFO, number 24616, June.

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    More about this item

    Keywords

    Wage determination; unemployment; job reallocation and polish regions;
    All these keywords.

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • L0 - Industrial Organization - - General
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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