The Impact of International Trade and Foreign Competition on Labour Earnings in Poland

This paper investigates the influence of international trade and increasing foreign competition on earnings in Poland. Using disaggregated income data for skilled labour in the years 1999 and 2004, and OLS and IV estimation methods it examines the impact of liberalisation of international trade and foreign direct investment flows between Poland and the European Union. The conducted analysis suggests that increased competition forces domestic firms to raise the salaries of the best educated workers.