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The heterogeneous regional effects of minimum wages in Poland

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  • Maciej Albinowski
  • Piotr Lewandowski

Abstract

We evaluate the impact of large minimum wage hikes on employment and wage growth in Poland between 2004 and 2018. We estimate panel data models utilizing the considerable variation in wage levels, and in minimum wage bites, across 73 Polish NUTS 3 regions. We find that minimum wage hikes had a significant positive effect on wage growth and a significant negative effect on employment growth only in regions of Poland that were in the first tercile of the regional wage distribution in 2007. These effects were moderate in size, and appear to be more relevant for wages. Specifically, if the ratio of minimum wage to average wage had remained constant after 2007, by 2018, the average wages in these regions would have been 3.2% lower, while employment would have been 1.2% higher. In the remaining two‐thirds of Polish regions, we find no significant effects of minimum wage hikes on average wages or on employment.

Suggested Citation

  • Maciej Albinowski & Piotr Lewandowski, 2022. "The heterogeneous regional effects of minimum wages in Poland," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 30(2), pages 237-267, April.
    • Handle: RePEc:wly:ectrin:v:30:y:2022:i:2:p:237-267
    DOI: 10.1111/ecot.12283
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    Cited by:

    1. Garcia-Louzao, Jose & Tarasonis, Linas, 2023. "Wage and Employment Impact of Minimum Wage: Evidence from Lithuania," Journal of Comparative Economics, Elsevier, vol. 51(2), pages 592-609.
    2. Aleksandra Majchrowska & Paweł Strawiński, 2024. "The evolution of the minimum wage in Poland and its consequences on labour market," Bank i Kredyt, Narodowy Bank Polski, vol. 55(1), pages 55-74.
    3. Piotr Lewandowski & Iga Magda, 2023. "The labor market in Poland, 2000−2021," IZA World of Labor, Institute of Labor Economics (IZA), pages 426-426, March.

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    More about this item

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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