Eriksson, Tor Viking5; Pytlikova, Mariola5; Warzynski, Frederic5
1 Department of Economics, Aarhus School of Business, Aarhus BSS, Aarhus University2 Centre for Research in Integration, Education, Qualifications and Marginalization (CIM), Aarhus School of Business, Aarhus BSS, Aarhus University3 Center for Corporate Performance (CCP), Aarhus School of Business, Aarhus BSS, Aarhus University4 Department of Economics and Business Economics, Aarhus BSS, Aarhus University5 Department of Economics and Business Economics, Aarhus BSS, Aarhus University
Evidence from Linked Employer-Employee Data
In this paper, we look at the evolution of the Czech labor market, and its wage structure in particular, using a linked employer-employee dataset covering a large fraction of the Czech labor market over the period 1998-2006. Estimating conventional earnings equations we find evidence of diminishing gender inequality, decreased returns to human capital, especially to education. Moreover, exploiting the linked employer-employee character of the data set, we document changes in within-firm wage dispersion and short-term variations around a constant level of between-firm dispersion. Next, we investigate various hypotheses related to transition towards a market economy, increased domestic and international competition and an increasingly decentralized wage bargaining to explain these patterns. We find some support for that the three mechanisms - increased international competition, further marketisation and decentralized wage setting - all have contributed to the changes in the Czech wage structure.
Wage inequality; Transition countries; Linked employer-employee data
Main Research Area:
Four-Year Membership of Central and Eastern European Countries in the European Union: the effects and new calls for the national and regional labour markets, 2008