Impact of minimum wage increase on gender wage gap: Case of Poland

Abstract

This paper aims at assessing the effect of significant increase in the minimum wage observed in Poland in 2008–2009 on gender wage gap. To check the potentially differentiated effects throughout wage distribution authors analyse the impact of minimum wage increase separately for different age and educational groups. Innovative methodological approach which combines the non-parametric approach of DiNardo et al. (1996) with Oaxaca (1973) – Blinder (1973) decomposition is proposed.The results indicate that the significant decrease in gender wage gaps observed among younger workers in Poland in 2006–2010 could be attributed to an increase in the minimum wage level. The effects of minimum wage increases were negligible for the middle-aged workers. Changes in gender wage gaps among educational groups were much smaller. The results confirm that minimum wage policy could be an appropriate tool for decreasing the existing differentials in pay between men and women, however potential disemployment effects should be considered.