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Employment Fluctuations and Dynamics of the Aggregate Average Wage in Poland 1996 - 2003

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Listed:
  • Michal Myck
  • Leszek Morawski
  • Jerzy Mycielski

Abstract

The aggregate average wage is often used as an indicator of economic performance and welfare, and as such often serves as a benchmark for changes in the generosity of public transfers and for wage negotiations. Yet if economies experience a high degree of (nonrandom) fluctuation in employment the composition of the employed population will have a considerable effect on the computed average. In this paper we demonstrate the extent of this problem using data for Poland for the period 1996-2003. During these years unemployment in Poland almost doubled. We show that about a quarter of the growth in the average wage during this period could be contributed purely to changes in employment.

Suggested Citation

  • Michal Myck & Leszek Morawski & Jerzy Mycielski, 2006. "Employment Fluctuations and Dynamics of the Aggregate Average Wage in Poland 1996 - 2003," Discussion Papers of DIW Berlin 545, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp545
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    References listed on IDEAS

    as
    1. Richard Blundell & Howard Reed & Thomas M. Stoker, 2003. "Interpreting Aggregate Wage Growth: The Role of Labor Market Participation," American Economic Review, American Economic Association, vol. 93(4), pages 1114-1131, September.
    2. Gary Solon & Robert Barsky & Jonathan A. Parker, 1994. "Measuring the Cyclicality of Real Wages: How Important is Composition Bias?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(1), pages 1-25.
    3. Amanda Gosling & Stephen Machin & Costas Meghir, 2000. "The Changing Distribution of Male Wages in the U.K," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(4), pages 635-666.
    4. Bils, Mark J, 1985. "Real Wages over the Business Cycle: Evidence from Panel Data," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 666-689, August.
    5. Heckman, James J & Sedlacek, Guilherme L, 1990. "Self-selection and the Distribution of Hourly Wages," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 329-363, January.
    6. Meghir, Costas & Whitehouse, Edward, 1996. "The Evolution of Wages in the United Kingdom: Evidence from Micro Data," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 1-25, January.
    7. Richard Blundell & Howard Reed & Thomas M. Stoker, 1999. "Interpreting aggregate wage growth," IFS Working Papers W99/13, Institute for Fiscal Studies.
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    Cited by:

    1. Jacek Wallusch, 2010. "Poland: Minimum Wage, Employment and Labour Migration," Chapters, in: Daniel Vaughan-Whitehead (ed.), The Minimum Wage Revisited in the Enlarged EU, chapter 11, Edward Elgar Publishing.
    2. Aleksandra Majchrowska & Paweł Strawiński, 2016. "Regional Differences in Gender Wage Gaps in Poland: New Estimates Based on Harmonized Data for Wages," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 8(2), pages 115-141, June.
    3. Bukowski, Maciej & Koloch, Grzegorz & Lewandowski, Piotr, 2008. "Shocks and rigidities as determinants of CEE labor markets' performance. A panel SVECM approach," MPRA Paper 12429, University Library of Munich, Germany.
    4. Paweł Strawiński, 2009. "Ins and Outs of Polish Unemployment," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 1(3), pages 243-259, November.
    5. Costas Christou, 2013. "The dynamics of wage determination in Romania," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 21(4), pages 713-729, October.

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    More about this item

    Keywords

    Aggregate wage; Employment dynamics; Poland;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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