Changes in the Wage Structure during Economic Transition in Central and Eastern Europe

Abstract

No AccessWorld Bank Technical Papers12 Aug 2013Changes in the Wage Structure during Economic Transition in Central and Eastern EuropeAuthors/Editors: Jan J RutkowskiJan J Rutkowskihttps://doi.org/10.1596/0-8213-3750-5SectionsAboutPDF (0.6 MB) ToolsAdd to favoritesDownload CitationsTrack Citations ShareFacebookTwitterLinked In Abstract:This paper depicts changes in the wage structure during economic transition in Central and Eastern Europe (CEE) emphasizing various aspects of wage inequality and age differentials by educational attainment. The major findings are as follows: a) economic transition is associated with a uniform substantial fall in real wages, although this has been partially exaggerated due to underestimation of the consumer price inflation rate; b) the fall in real wages has been so deep that all deciles of workers experienced wage losses with low paid workers suffering the most; c) the earnings distribution has widened significantly. Changes have taken place at both ends of the distribution, but changes at the top have been more pronounced than at the bottom. The overall rise in earning inequality has been moderate; d) wage income has been transferred from the low paid majority to the relatively well paid minority; e) in a large number of transition economies, the incidence of low pay has become high; f) returns to education have increased in the course of transition. 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