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Regional Price Indices and Real Wage Equalization in Poland

Bartlomiej Rokicki

Chapter 16 in Geographical Labor Market Imbalances. Recent Explanations and Cures, 2015, pp 17-35 from AIEL - Associazione Italiana Economisti del Lavoro

Abstract: The goal of this chapter is an empirical verification of the hypothesis concerning the real wage equalization among different regions in the case of transition countries. In particular, we focus on Polish NUTS2 regions and for the first time, we apply regional PPP deflators in order to prove whether they may influence the results of the convergence analysis. The issues concerning the evolution of regional labor market disparities within Central and Eastern European countries have been thoroughly discussed in many papers. Still, most of them have focused on the persisting differences in the regional unemployment rates. At the same time, the dispersion of wages across different locations and its evolution over time has been considered as one of the possible factors influencing spatial unemployment rate differentials. Less attention was though paid to the analysis of regional wage equalization process per se. Up to now, the existing studies were based on wage data expressed either in current prices or constant ones but with price deflators calculated at the level of state. Here, we find that the application of regional PPP deflators significantly decreases the overall level of wage disparities across Polish regions (as compared to nominal wages). Nevertheless, it does not significantly change the overall pattern of their evolution. Hence, there is a tendency toward regional real wage divergence rather than equalization.

Keywords: PPP; Regional convergence; Spatial unemployment differentials; Poland (search for similar items in EconPapers)
JEL-codes: E31 J31 R1 (search for similar items in EconPapers)
Date: 2015
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