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European Integration and Spatial Wage Structure in Poland

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Tijdschrift voor Economische en Sociale Geografie

Published online on

Abstract

In this paper we examine the relationship between average wages and market potential across Polish 16 NUTS 2 administrative units during the 1995–2009 period to study the effects of increased international market access using the new economic geography approach. In particular, we estimate the relationship between average regional wages and the market‐potential function derived from the modified Helpman‐Hanson theoretical model. We demonstrate that both before and after Poland's entry into the European Union the regional economic potential is positively related to the regional level of wages. The magnitude of the estimated parameters on the market potential after Poland's entry into the EU is lower compared to the estimates obtained for the period before the entry but the difference does not seem significant.