Estimating the Effect of Emigration from Poland on Polish Wages: Study Paper No. 43

This study paper contributes to the growing literature examining the effects emigration has on the labor markets of the sending countries, focusing on Poland for the period 1998-2007. A simple model has been developed that guides empirical specification, providing a clear interpretation for estimates. The data used is unique in that it contains information about household members who are currently living abroad, allowing the development of region specific emigration rates, and the ability to estimate the effect emigration has on wages, using within-region variation. The study provides estimates, using information on labor market shocks in the largest destination countries as instruments. The results show that emigration from Poland was largest for workers with intermediate skill levels and that it is the wages for this skill group that have increased most. It also shows that emigration led to a slight overall increase in wages, yet workers at the low end of the skill distribution did not make gains, but may have experienced slight wage decreases.