The Optimal Differentiation of Wages in Poland - an econometric analysis
Languages of publication
The authors formulate a hypothesis that there exists an optimal differentiation of wages. When the differentiation is smaller than optimal then the most creative individuals are not adequately remunerated and thus, by the same token, poorly motivated. When this differentiation is higher than optimal, the employees commanding low skills receive low wages. Then there emerges a feeling of injustice and exploitation which negatively affects social tissue, constrains trust and lowers social capital. Empirical analysis for Poland covers 1980 - 2004. Initial estimates suggest that starting from 1994 wage differentiation is higher than optimal and is increasing. The highest deceleration of growth, caused by an excessive wage differentiation, occurred in 2003 and 2004, when the latter exceeded 3 percentage points. It seems that this results display a small overshoot. Other variables, e.g. crime rate, could affect the outcome of the analysis.
Publication order reference
CEJSH db identifier