Individual Pay and Outside Options: Evidence from the Polish Labor Force Survey
University of Dublin - Trinity College
Patrick Paul Walsh
UCD; Institute for the Study of Labor (IZA)
William Davidson Institute Working Paper No. 364; IZA Discussion Paper No. 295
Using Polish Labour Force Survey data, we examine whether competition for labor 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 labor market conditions explain approximately 50 percent of the differences in expected individual earnings across regions, while differences in inherited human capital and occupation structures explain the rest.
Number of Pages in PDF File: 45
Keywords: Wage Determination, Unemployment, Job Reallocation, Polish Regions
JEL Classification: J6, L0, O5working papers series
Date posted: April 16, 2001
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