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

  • Fiona Duffy
  • Patrick Paul Walsh

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.

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File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp364.pdf
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Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 364.

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Length: pages
Date of creation: 01 Mar 2000
Date of revision:
Handle: RePEc:wdi:papers:2001-364
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