The heterogenous regional effects of minimum wages in Poland

Maciej Albinowski and Piotr Lewandowski

No 04/2020, IBS Working Papers from Instytut Badan Strukturalnych

Abstract: Since 2008, Poland has been among the EU countries that have increased their minimum wage levels the most, following period in the mid-2000s during which the country’s minimum wage was barely raised. We evaluate the impact of these minimum wage hikes on employment and wage growth in Poland between 2004 and 2018. We estimate panel data models utilising the considerable variation in wage levels, and in minimum wage bites, across 73 Polish NUTS 3 regions. We find that minimum wage hikes had a significant positive effect on wage growth and a significant negative effect on employment growth only in regions of Poland that were in the first tercile of the regional wage distribution in 2007. These effects were moderate in size, and appear to be more relevant for wages. Specifically, we show that if the ratio of minimum wage to average wage had remained constant after 2007, by 2018, the average wages in these regions would have been 3.4% lower, while employment would have been 1.2% higher. On the other hand, in the remaining two-thirds of Polish regions, we find no significant effects of minimum wage hikes on average wages or on employment. We also find indicative evidence that the effects on employment growth differ between groups of workers: i.e., that they are negative for men and for workers in industry, but they are positive for women and for workers in services.

Keywords: minimum wage; spatial heterogeneity; panel data (search for similar items in EconPapers)
JEL-codes: J21 J23 J38 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2020-06
New Economics Papers: this item is included in nep-eur, nep-geo, nep-lma and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ibs.org.pl/app/uploads/2020/06/Minimum_wage_Poland_IBS_WP_04_2020.pdf English Version (application/pdf)

Related works:
Journal Article: The heterogeneous regional effects of minimum wages in Poland (2022)
Working Paper: The Heterogenous Regional Effects of Minimum Wages in Poland (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ibt:wpaper:wp042020

Access Statistics for this paper

More papers in IBS Working Papers from Instytut Badan Strukturalnych Contact information at EDIRC.
Bibliographic data for series maintained by IBS ().