The Evolution of the Foreign-Ownership Wage Premium in Poland
Keywords:Foreign-owned firms, Domestic firms, Wage differential, Poland
The study examines the foreign-domestic wage differential in Poland during 2014-2017. The individual-level data come from ongoing surveys conducted by a major Polish HR consulting firm. The empirical analysis shows that during this period, there was a substantial (albeit decreasing) raw wage advantage for workers whom foreign-owned firms employed. This differential reduced significantly after controlling for personal, work, and workplace characteristics. Foreign firm employees at the lower end of the earnings distribution faced a smaller wage gap than those at the upper end; the wage gap showed a noticeable decline at all the percentiles over the years. Wage gap decompositions reveal that a predominant portion of the wage differential was due to differences in observed characteristics; nevertheless, a substantial portion of the wage gap remained unexplained.
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