Work detail

Inter-industry Wage Differentials in the Czech Republic

Author: Mgr. Stanislav Hofman
Year: 2013 - summer
Leaders: doc. Ing. Vladislav Flek CSc.
Work type: Finance, Financial Markets and Banking
Language: English
Pages: 91
Awards and prizes: M.A. with distinction from the Dean of the Faculty of Social Sciences for an extraordinarily good masters diploma thesis.
Abstract: This thesis examines inter-industry wage differentials in the Czech Republic, using the European Union – Statistics on Income and Living (EU-SILC 2009) survey as our primary data source. Findings show that even after controlling for large number of workers and jobs characteristics wage differences based on industry affiliation still persist. The variation of the inter-industry wage differentials amounts to approximately 5 percent with the maximum wage level difference of 25 percent between the financial sector and agriculture. By applying two distinct methodologies we tested the hypothesis that the inter-industry wage differentials are actually caused by higher concentration of workers with better unmeasured abilities in higher-paying industries. Neither of the two methods rejected the unobserved ability hypothesis. Finally, our analysis also shows that the inter-industry wage differentials can be to a certain extent attributed to rent-sharing and different labour turnover costs across sectors.


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