Changes in the Structure of Earnings During the Polish Transition

54 Pages Posted: 31 Jan 2006  

Michael P. Keane

Arizona State University (ASU) - Economics Department; University of Technology, Sydney (Visiting July 2006-Present)

Eswar S. Prasad

Cornell University - Dyson School of Applied Economics and Management; Cornell University - Department of Economics; Brookings Institution; NBER; IZA Institute of Labor Economics

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Date Written: August 2002

Abstract

This paper documents that inequality in labor earnings increased substantially during the economic transition in Poland. One surprising result is that earnings inequality increased markedly in both the private and public sectors, indicating that even state-owned enterprises in Poland moved toward competitive wage setting during the transition. Education premia increased sharply, while experience premia declined. Increases in within-group inequality account for about 60 percent of the increase in overall wage inequality. But, contrary to the experience of countries like the United States, increases in within-group inequality in Poland were very different across skill groups, with much larger increases for highly educated workers.

Keywords: Wage inequality, between- and within-group inequality, education and experience premia, labor reallocation, transition

JEL Classification: J31, 033, P20

Suggested Citation

Keane, Michael P. and Prasad, Eswar S., Changes in the Structure of Earnings During the Polish Transition (August 2002). IMF Working Paper, Vol. , pp. 1-54, 2002. Available at SSRN: https://ssrn.com/abstract=879918

Michael P. Keane (Contact Author)

Arizona State University (ASU) - Economics Department ( email )

Tempe, AZ 85287-3806
United States

University of Technology, Sydney (Visiting July 2006-Present)

PO Box 123 Broadway
NSW 2007
Australia
480-965-1053 (Phone)
480-965-0748 (Fax)

Eswar S. Prasad

Cornell University - Dyson School of Applied Economics and Management ( email )

440 Warren Hall
Ithaca, NY 14853
United States

HOME PAGE: http://prasad.aem.cornell.edu

Cornell University - Department of Economics ( email )

414 Uris Hall
Ithaca, NY 14853-7601
United States

Brookings Institution ( email )

1775 Massachusetts Ave, NW
Washington, DC 20036
United States

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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