Evolution of the Public-Sector Wage Premium in Poland

Abstract

The aim of this paper is to estimate the adjusted sectoral wage gap in Poland from 1999 to 2012. We use a set of individual data from a survey on the structure of earnings by occupation (SEO) carried out by Poland’s Central Statistical Office (CSO) every two years for businesses with more than nine employees. We apply quantile regression and the Ñopo decomposition method to address several methodological problems of wage differential analysis. We show that, after controlling for structural differences in employment, there is no clear trend in the evolution of the adjusted public-sector wage premium in Poland in recent years. The parametric approach indicates a positive and growing premium, with significant variations across different parts of the wage distribution. The non-parametric approach yields different results, indicating a negative premium with no clear trend in the 1999-2012 period, with a declining public-sector wage penalty in recent years. This means that the Polish labour market is becoming increasingly similar to its counterparts in developed countries in this respect.

Keywords

• wage differentials
• public sector wages
• quantile regression
• ñopo decomposition
• poland