Estimating the Effect of Emigration from Poland on Polish Wages

This paper contributes to a small but growing literature that studies the effects emigration has on the labour markets of the sending countries, focussing on Poland for the period 1998-2007. We develop a simple model that guides our empirical specification, and provides a clear interpretation for our estimates. The data we use is unique, in that it contains information about household members who are currently living abroad, allowing us to develop region specific emigration rates, and to estimate the effect emigration has on wages, using within-region variation. We also provide IV estimates, using information on labour market shocks in the largest destination countries as instruments. Our results show that emigration from Poland was largest for workers with intermediate skill levels, and that it is wages for this skill group that increased most. We also show that emigration led to a slight overall increase in wages. Workers at the low end of the skill distribution did not gain, but may have experienced slight wage decreases.