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Is there room for improvement in wage setting in Poland’s public administration?

Author

Listed:
  • Maciej Albinowski
  • Iga Magda

Abstract

There are several areas for improvement in wage setting in the public administration sector in Poland. Public administration pays a lower premium for tertiary education and offers lower wages for young employees than the business sector. Instead, public administration provides significant returns to job tenure, incentivising lifelong employment. Such a model is conducive to the smooth functioning of the administration. However, it limits the possibilities of structural changes in employment. The present remuneration system may also lead to negative selection, where low-productivity workers remain in the public administration till retirement, while high-productivity workers choose employment in the business economy. To address these issues, we propose a reduction in automatic seniority premiums, an increase in basic wages, and better valuation of scarce skills.

Suggested Citation

  • Maciej Albinowski & Iga Magda, 2023. "Is there room for improvement in wage setting in Poland’s public administration?," IBS Policy Papers 02/2023, Instytut Badan Strukturalnych.
    • Handle: RePEc:ibt:ppaper:pp022023
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    File URL: https://ibs.org.pl/wp-content/uploads/2023/07/Policy_Paper_Public_Administration_EN-1.pdf
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    More about this item

    Keywords

    public administration wages; public-private wage gap; returns to experience;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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