The wage structure and wage distribution in Poland, 1994‐2001

Abstract

Analyzes the wage structure and wage distribution for male and female Polish workers during a more mature phase of a transition to a market economy, namely 1994‐2001. The results indicate an overall rise in earnings inequality for both genders during this period. Contrary to conventional expectations, changes in the composition of employment caused by a deep restructuring process did not have a significant impact on earnings inequality. Throughout this period, the changes in the wage structure and wage distribution were almost entirely due to the changes in returns to worker characteristics. However, does not observe the “explosion of differentials at all levels,” predicted by many leading models on transition. Wage structures for men and women evolved in different ways. This analysis suggests that the effect of changes in labor supply and institutional factors on the wage structure and wage distribution was relatively unimportant. Demand side factors seem to be far more important in explaining the dynamics of earnings inequality in Poland during 1994‐2001.