Minimum wage and youth unemployment in local labor markets in Poland

A revised and updated version of this working paper is published in the journal: ROCZNIKI KOLEGIUM ANALIZ EKONOMICZNYCH, KOLEGIUM ANALIZ EKONOMICZNYCHThe aim of the paper is to analyze the impact of minimum wage on youth unemployment (less than 25 years old) in local (NUTS4) labor markets in Poland. The results show that minimum wage in Poland significantly affects youth unemployment in local labor markets in Poland. The higher is the minimum to average wage ratio on local labor market, the higher is the share of youth unemployed in total unemployment. The fact that youths are the group which is disproportionally affected by minimum wage increases is confirmed by low and/or insignificant value of the parameter by minimum to average wage ratio for other, older groups of workers

Does minimum wage reduce youth employment on regional labour markets in Poland?

A revised and updated version of this working paper is published by Taylor & Francis in the journal:Emerging Markets Finance and Trade Volume 52, 2016 - Issue 9The main aim of the paper was to verify whether the changes in minimum to average wage ratio in Poland negatively affected youth (15-24 years old) employment rate. Moreover we tried to answer the question if this impact differs among regions. We analysed a model where changes in youth employment rate were the function of changes in minimum to average wage ratio as well as other (demand and supply) variables. The analyses were conducted on 16 Polish NUTS2 regions in 1999-2012. The analyses conducted in the paper showed that when we estimated the average impact of changes in minimum to average wage ratio on changes in youth employment rate the parameter was not significant. Changes in youth employment were driven mostly by changes in business cycle and in school enrolment ratio. After having checked for the regional variation of the determination of the youths’ employment rate we found that the impact of minimum on employment differed significantly among regions, both in terms of size and sign. The regions where youth employment rates were negatively affected in the whole period by changes in minimum to average wage ratio were the rural, less developed districts of Poland (Lubelskie and Podkarpackie). The results of our analyses indicate in regions with low productivity and low average wages the level of unique minimum wage may be too high. Low youth employment rates in those regions in Poland may not only result from insufficient aggregate demand but also from relatively high costs of employing young workers

The cost of fiscal tightening in Poland on the road to the Euro: does the labour market matter? (CGE model simulations)

The paper presents an assessment of macroeconomic and also some selected structural consequences of the proposed fiscal consolidation necessary for Poland to fulfil the Maastricht fiscal criteria. The fiscal adjustments are assessed with a CGE model simulated over the 2006–2008 horizon. Two sets of simulations are analysed, namely rigid vs. flexible wages. It is shown that the fiscal tightening programme analysed in this paper does not necessarily incur any costs in terms of aggregate GDP loss in years 2006–2008. On the contrary, it may generate additional growth effects, provided that downward wage adjustments reduce unit labour costs, thus fostering the growth. It is concluded that the condition for the achievement of a smooth and relatively low-cost fiscal adjustment is to supplement it with labour market reform.fiscal reform, Maastricht criteria, labour market, CGE model

Globalization and the Polish economy: stylized facts and simulations using a Computable General Equilibrium Model

The aim of the paper is to quantitatively assess the impact of globalization on the economy of Poland in the medium term. Four channels of the impact of globalization are distinguished: (i) trade openness, (ii) productivity improvement, (iii) labour migrations, (iv) liberalization of the services sector. We employ a computable general equilibrium model with multiple industries and households and imperfect competition features. Our results show positive and quite significant effects of globalization on the performance of the Polish economy, stemming mainly from productivity improvements and liberalization of services. The sizeable expected migrations result in negative effects of globalization by decreasing growth potential and causing upward pressure on wages. At the sectoral level, globalization is particularly beneficial to some exporting sectors and skilled segments of the labour market.globalization, computable general equilibrium, labour migrations, trade liberalization

Minimum Wage in Poland: Economy-wide or Regionally Differentiated?

The aim of the paper is to verify the hypothesis that minimum wage may have negative impact on employment in Poland, at least for some workers groups and regions. After having reviewed theoretical literature on minimum wage and having discussed stylized facts on minimum wage in Poland, the authors define econometric model to check the impact of minimum wage on employment in Poland and then discuss the results. The main conclusion of the study is that while minimum wage legislation is not very important for the whole labour market performance it may create adverse effects to employment of some vulnerable groups like young workers. 4

The cost of fiscal tightening in Poland on the road to the Euro: does the labour market matter? (CGE model simulations)

The paper presents an assessment of macroeconomic and also some selected structural consequences of the proposed fiscal consolidation necessary for Poland to fulfil the Maastricht fiscal criteria. The fiscal adjustments are assessed with a CGE model simulated over the 2006–2008 horizon. Two sets of simulations are analysed, namely rigid vs. flexible wages. It is shown that the fiscal tightening programme analysed in this paper does not necessarily incur any costs in terms of aggregate GDP loss in years 2006–2008. On the contrary, it may generate additional growth effects, provided that downward wage adjustments reduce unit labour costs, thus fostering the growth. It is concluded that the condition for the achievement of a smooth and relatively low-cost fiscal adjustment is to supplement it with labour market reform

Globalization and the Polish economy: stylized facts and simulations using a Computable General Equilibrium Model

The aim of the paper is to quantitatively assess the impact of globalization on the economy of Poland in the medium term. Four channels of the impact of globalization are distinguished: (i) trade openness, (ii) productivity improvement, (iii) labour migrations, (iv) liberalization of the services sector. We employ a computable general equilibrium model with multiple industries and households and imperfect competition features. Our results show positive and quite significant effects of globalization on the performance of the Polish economy, stemming mainly from productivity improvements and liberalization of services. The sizeable expected migrations result in negative effects of globalization by decreasing growth potential and causing upward pressure on wages. At the sectoral level, globalization is particularly beneficial to some exporting sectors and skilled segments of the labour market

The cost of fiscal tightening in Poland on the road to the Euro: does the labour market matter? (CGE model simulations)

The paper presents an assessment of macroeconomic and also some selected structural consequences of the proposed fiscal consolidation necessary for Poland to fulfil the Maastricht fiscal criteria. The fiscal adjustments are assessed with a CGE model simulated over the 2006–2008 horizon. Two sets of simulations are analysed, namely rigid vs. flexible wages. It is shown that the fiscal tightening programme analysed in this paper does not necessarily incur any costs in terms of aggregate GDP loss in years 2006–2008. On the contrary, it may generate additional growth effects, provided that downward wage adjustments reduce unit labour costs, thus fostering the growth. It is concluded that the condition for the achievement of a smooth and relatively low-cost fiscal adjustment is to supplement it with labour market reform

Should minimum wage in Poland vary depending on the region?

The paper looks at the issue of minimum wage in Poland and other EU member states. First, the definitions, measurement, dynamics and legislation related to the minimum wage are introduced. In the next section the authors discuss whether it is reasonable to regionally diversify the minimum wage in Poland, as the analysis shows that such economic indicators as the average wage, labour productivity and costs of living vary depending on the region. Authors claim that these factors speak in favor of regional diversification of the minimum wage