Employment Fluctuations and Dynamics of the Aggregate Average Wage in Poland, 1996-2003

21 Pages Posted: 26 Sep 2007  

Michal Myck

German Institute for Economic Research (DIW Berlin); IZA Institute of Labor Economics

Leszek Morawski

University of Warsaw - Department of Economics and Business

Jerzy Mycielski

University of Warsaw

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Abstract

The aggregate average wage is often used as an indicator of economic performance and welfare, and as such often serves as a benchmark for changes in the generosity of public transfers and for wage negotiations. Yet if economies experience a high degree of (non-random) fluctuation in employment, the composition of the employed population will have a considerable effect on the computed average. In this paper we demonstrate the extent of this problem using data for Poland for the period 1996-2003. During these years the employment rate in Poland fell from 51.2 percent to 44.2 percent and most of this fall occurred between the end of 1998 and the end of 2002. We show that about a quarter of the growth in the average wage during this period could be attributed purely to changes in employment.

Suggested Citation

Myck, Michal and Morawski, Leszek and Mycielski, Jerzy, Employment Fluctuations and Dynamics of the Aggregate Average Wage in Poland, 1996-2003. Economics of Transition, Vol. 15, No. 4, pp. 759-779, October 2007. Available at SSRN: https://ssrn.com/abstract=1017133 or http://dx.doi.org/10.1111/j.1468-0351.2007.00306.x

Michal Myck (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Leszek Morawski

University of Warsaw - Department of Economics and Business ( email )

Warsaw, 00-241
Poland

Jerzy Mycielski

University of Warsaw ( email )

Krakowskie Przedmiescie 26/28
Warszawa, Pl-00681
Poland

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