The employment effects of minimum wage in Poland Piotr Lewandowski - - PowerPoint PPT Presentation

The employment effects of minimum wage in Poland

Piotr Lewandowski Agnieszka Kamińska

Minimum wage in Poland

1093 1078 1022 1056 1079 1074 1114 1148 1348 1466 1461 1499 1556 1600 1665

30% 35% 40% 45% 720 920 1120 1320 1520 1720 as a proportion of average monthly earnings (right axis) at prices of 2013 (left axis)

2 4 6 8 10 12 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 HBS LFS

Percentage of all full-time workers earning below the minimum wage

Minimum wage earners

What we have done

• 1. Total employment
• 2. The structure of

employment

• 3. Groups

DATA

• LFS for Poland
• Yearly panel
• Period: 2001-

2013

• Persons under

55 years of age

• Robustness:
• HBS for Poland
• Yearly panel
• Period: 2001-

2012

• Not here yet

Propensity Score Matching

• Criteria:
• Personal

characteristics

(sex, age, educational attainment, marital status etc.)

• Job characteristics

(profession, employment status etc.)

• Firm characteristics

(size, sector)

Average Treatment Effects

• ATT on probabilities
• f outflows to:
• inactivity
• unemployment
• or remaining

employed

• Treated – workers

earning in t more than 80% of MW in t and less than MW in t+1

Effect on employment

• 1. Total employment
• 2. The structure of

employment

• 3. Groups

*** ** **

• 8%
• 6%
• 4%
• 2%

0% 2001-2012 2001-2006 2007-2012 2001-2012

ATT on the probability of remaining employed The effect lower in the 2007-2012 period → relatively higher labour demand

p-value: * - 0,05; ** - 0,01; *** - 0,001

** * * *** ** **

• 10%
• 8%
• 6%
• 4%
• 2%

0% 2001-2012 2001-2006 2007-2012 2001-2012 permanent temporary

Effect on employment

• 1. Total employment
• 2. The structure of

employment

• 3. Groups

ATT on the probability of remaining employed by the form of current contract

p-value: * - 0,05; ** - 0,01; *** - 0,001

Workers with permanent contracts

• 1. Total employment
• 2. The structure of

employment

• 3. Groups

*** ** *** ** ** ** 0,0% 0,5% 1,0% 1,5% 2,0% 2,5% temporary employment unemployment inactivity 2001-2006 2007-2012

p-value: * - 0,05; ** - 0,01; *** - 0,001

Workers with temporary contracts

• 1. Total employment
• 2. The structure of

employment

• 3. Groups

*** ** *** ** ** **

• 4%
• 2%

0% 2% 4% 6% 8% permanent employment unemployment inactivity 2001-2006 2007-2012

p-value: * - 0,05; ** - 0,01; *** - 0,001

Gender

• 1. Total employment
• 2. The structure of

employment

• 3. Groups

*** ***

• 7%
• 6%
• 5%
• 4%
• 3%
• 2%
• 1%

0% men women

• 62% of the minimum-

wage earners are women

• 8% of women earning MW

have tertiary education, compared to 4% of men

p-value: * - 0,05; ** - 0,01; *** - 0,001

The effect on the probability of remaining employed

Age

• 1. Total employment
• 2. The structure of

employment

• 3. Groups

*** *** **

• 10%
• 9%
• 8%
• 7%
• 6%
• 5%
• 4%
• 3%
• 2%
• 1%

0% 15-29 30-44 45-55

The minimum wage earners:

• 15-29 years – 33%
• 30-44 years – 42%
• 45-55 years – 25%

p-value: * - 0,05; ** - 0,01; *** - 0,001

Educational attainment

• 1. Total employment
• 2. The structure of

employment

• 3. Groups
• Tertiary educated constitute 6% of the minimum-wage earners

p-value: * - 0,05; ** - 0,01; *** - 0,001

*** ** *** ** **

• 12%
• 10%
• 8%
• 6%
• 4%
• 2%

0% tertiary post-secondary and secondary vocational general secondary basic vocational lower secondary and primary

General secondary education

• 1. Total employment
• 2. The structure of

employment

• 3. Groups

Difference in wages of employees and civil law contractors are highest among men with general secondary education

500 1000 1500 2000 2500 3000 3500 4000

15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 >65

Men, average wages in 2013

Civil law contract Employment contract

In recent years

Increase of the minimum wage in Poland:

Had a modest impact on total employment Probably influenced the structure of employment Good timing with a strong labour demand after 2007

1. 2. 3.

Minimum wage vs. poverty

Percentage of near-minimum-wage earners

2 4 6 8 10 12 14 16 1 2 3 4 5 6 7 8 9 10 Deciles of equivalised income 2007 2012

Relative poverty line in 2012

Thank you for your attention

#dualityconf2014

piotr.lewandowski@ibs.org.pl agnieszka.kaminska@ibs.org.pl www.ibs.org.pl twitter.com/ibs_thinktank