Firms and wage inequality in Central and Eastern Europe

Abstract

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GVC and wage dispersion. Firm-level evidence from employee?employer database

“…The majority of previous studies focused on the effects of trade and international production sharing on skilled-unskilled wage inequalities or gender wage differences (see, i.a., Magda et al, 2020;Nikulin & Wolszczak-Derlacz, 2019;Wang et al, 2021). This study is believed to fill the research gap concerning limited cross-country evidence on a nexus of wage inequality-GVCs analysed from the perspective of components within and between firms.…”

“…The existing research on the determinants of wage inequalities may be divided into two main types -analysing either macro-level or micro-level determinants of such inequalities (Magda et al, 2020). The macro-level research stresses the role played by trade, labour market frictions, technological advancement or migrations (Akerman et al, 2013;Helpman et al, 2017).…”

“…The macro-level research stresses the role played by trade, labour market frictions, technological advancement or migrations (Akerman et al, 2013;Helpman et al, 2017). The micro-level perspective underlines the role of individual workers' characteristics (which include education, skill level, age, and occupation type) in explaining the observed increase in wage inequality (Magda et al, 2020;Nikulin & Wolszczak-Derlacz, 2019).…”

“…169-170). Moreover, as Magda et al (2020) argue, wage inequalities between firms are typical of countries with a higher level of general wage inequality.…”

“…(see, e.g., Magda et al, 2020, for a similar approach). Given particular interest in wage inequalities between and within firms, is expressed as the product of two components: individual wage to average firm wage ( ) -within firm component; and average firm's wage to the country mean ( ) -between firm component:…”