Unexplained native-immigrant wage gap in Poland in 2015-2016. Insights from the surveys in Warsaw and in Lublin

Abstract

In the modern history, Poland has never experienced large wave of labour immigration comparable to observed since 2014. Massive immigration provoked a public discussion about the consequences of immigration for the Polish labour market. In this paper we shed some light on that problem by analysing the level of the native-immigrant wage gap in two cities in Poland using two popular methods of filtering off the impact of differences between immigrant and native workers in composition of their individual characteristics and their workplaces. These methods are: Blinder-Oaxaca decomposition and non-parametric decomposition proposed by Nopo (2008). In order to compare native and immigrant workers we use the Polish Labour Force Survey (PLFS) data and the special survey of immigrants ordered by National Bank of Poland and conducted using respondent driven sampling (RDS) method. The results of the decompositions show that the difference in average wages of immigrant and native workers until 2016 is explained mostly by the differences in the composition of features of persons and workplaces. Unexplained wage gap concerned only hourly wages in Warsaw (and amounted to between 4-15% depending on method of decomposition and weighting of the results) but was not significant in Lublin. However unexplained wage gap was significant for occupations with higher wages in both cities. In some cases migrants achieved on average higher wages than native workers. Most immigrants lived in Poland for relatively short period of time and in this early stage of immigration process there were also no signs of narrowing the unexplained wage gap for immigrants who stayed longer than others.