Increased Sorting and Wage Inequality in the Czech Republic

24 Pages Posted: 16 Mar 2013

See all articles by Tor Eriksson

Tor Eriksson

Aarhus University - Department of Economics

Mariola Pytliková

Danish Institute of Governmental Research (KORA)

Frederic Warzynski

Aarhus University - Department of Economics

Date Written: April 2013

Abstract

This paper makes use of a linked employer–employee dataset to examine the evolution of wage inequality in the Czech Republic during 1998–2006. We find evidence of slightly increasing returns to human capital and diminishing gender inequality and document sharp increases in both within‐firm and between‐firm inequality. We investigate several hypotheses to explain these patterns: increased domestic and international competition, decentralized wage bargaining, skill‐biased technological change and a changing educational composition of the workforce. Domestic competition is found to lower within‐firm inequality whereas we find no evidence that increased international trade at the industry level is associated with higher between‐ or within‐firm wage inequality. The key factors driving the observed increase in wage inequality are increased educational sorting and the inflow of foreign firms to the Czech Republic.

Keywords: Sorting, wage inequality, linked employer–employee dataset, firm panel data, Czech Republic

Suggested Citation

Eriksson, Tor and Pytliková, Mariola and Warzynski, Frederic, Increased Sorting and Wage Inequality in the Czech Republic (April 2013). Economics of Transition, Vol. 21, Issue 2, pp. 357-380, 2013, Available at SSRN: https://ssrn.com/abstract=2234295 or http://dx.doi.org/10.1111/ecot.12014

Tor Eriksson (Contact Author)

Aarhus University - Department of Economics ( email )

Fuglesangs Allé 4
Aarhus, 8210
Denmark
45 87164978 (Phone)

Mariola Pytliková

Danish Institute of Governmental Research (KORA)

Dampfaergevej 27-29
Copenhagen, 2100

Frederic Warzynski

Aarhus University - Department of Economics ( email )

hermodsvej 22
DK-8230 Åbyhøj
Denmark
+45 89 48 61 95 (Phone)

HOME PAGE: http://www.hha.dk/~fwa/frederic.htm

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
1
Abstract Views
233
PlumX Metrics