Individual Pay and Outside Options: Evidence from the Polish Labor Force Survey

45 Pages Posted: 16 Apr 2001

See all articles by Fiona Duffy

Fiona Duffy

Trinity College (Dublin)

Patrick Paul Walsh

UCD; Institute for the Study of Labor (IZA)

Date Written: May 2001

Abstract

Using Polish Labour Force Survey data, we examine whether competition for labor has induced individual pay to depend on outside options, availability and quality of jobs. Exploiting the lack of inter-regional job and worker flows, we estimate the elasticity of individual pay, amongst a rich set of individual characteristics, to be approximately -0.1 for local unemployment (job shortages) and +0.1 for local job reallocation (restructuring). Variations in local labor market conditions explain approximately 50 percent of the differences in expected individual earnings across regions, while differences in inherited human capital and occupation structures explain the rest.

Keywords: Wage Determination, Unemployment, Job Reallocation, Polish Regions

JEL Classification: J6, L0, O5

Suggested Citation

Duffy, Fiona and Walsh, Patrick Paul, Individual Pay and Outside Options: Evidence from the Polish Labor Force Survey (May 2001). Available at SSRN: https://ssrn.com/abstract=265439 or http://dx.doi.org/10.2139/ssrn.265439

Fiona Duffy

Trinity College (Dublin)

2-3 College Green
Dublin, Leinster D2
Ireland

Patrick Paul Walsh (Contact Author)

UCD ( email )

University College Dublin
Belfield, Dublin Dublin 4
Ireland

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

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