Earnings and Human Capital Distribution in Poland
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Publication date: 2007-12-31
GNPJE 2007;220(11-12):55-84
The paper analyzes the relationship between the skills and earnings of Polish employees. The starting point for the discussion is an earnings equation proposed by Mincer (J. Mincer, Schooling, Experience and Earnings, 1974) as well as its modified form that takes into account a nonlinear relationship between the level of education and wages. The analysis is designed to examine income disparities in Poland, in particular to show the differences among individual professional groups. The authors evaluate the influence of the level of education and professional experience of individuals on income disparities. Finally, they show differences in pay between men and women. Econometric analyses carried out by the authors confirm that education and professional experience have a statistically significant influence on employees’ pay. The general rule is that employees with a higher education earn more. Moreover, differences in earnings in individual professional groups grow with the level of education. Another significant factor is an employee’s professional experience. People with more than 20 years of work experience earn 5-8 percent above the average, while the earnings of individuals who have less than a year of work experience are around 30 percent below the average. Statistical analyses made in the study point to a linear relationship between the level of education and pay and a nonlinear relationship between professional experience and earnings. The analyses also confirm the existence of major differences in pay between men and women. Women’s earnings were lower in both analyzed periods. Moreover, the influence of individual factors on the level of wages is different for men and women.
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