Changes in the Structure of Earnings During the Polish Transition
IMF Working Papers, August 1, 2002
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- Changes in the Structure of Earnings During the Polish Transition
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Bibliographic details
- Authors: Eswar S Prasad, Michael P. Keane
- Published: August 1, 2002
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451855715.001
Key findings on earnings inequality
- Inequality in labor earnings increased substantially during the economic transition in Poland.
- 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.
- Experience premia declined.
- Increases in within-group inequality account for about 60 percent of the increase in overall wage inequality.
- Increases in within-group inequality were very different across skill groups, with much larger increases for highly educated workers—contrasting with the experience of countries like the United States.
Analytical focus and methodology (as described)
- The paper documents changes in the structure of earnings during transition, emphasizing decomposition of overall wage inequality into between-group and within-group components.
- Key concepts preserved from the source include: between- and within-group inequality, earnings differential, earnings distribution, earnings premium, earnings regression, education and experience premia, gender earnings gap, labor reallocation, sector earnings dispersion, and transition dynamics.
Implications emphasized in the paper
- Wage-setting in state-owned enterprises shifted toward competitive patterns during the transition, contributing to rising inequality in the public sector.
- Rising education premia suggest increased returns to schooling in the transition economy.
- Declining experience premia indicate changing valuation of labor market seniority or accumulated experience during transition.
- The disproportionate rise in within-group inequality for highly educated workers points to heterogeneity in how the transition affected skill groups and suggests targeted considerations for policy addressing inequality among the highly educated.
Content in this bundle
- Changes in the Structure of Earnings During the Polish Transition - WP/02/135