The wage structure of Polish workers in Germany

Germany has historically received a substantial inflow of immigrants from Poland. Polish workers are the second-largest foreign employment group in Germany and contribute substantially to the German economy. In this article, we draw on a large administrative dataset to analyse the wage structure of Polish employees and consider a wide range of factors, including individual and firm characteristics, labour market performance measures and potential network effects. We also account for spatial selectivity, distinguishing between urban, semi-urban and peripheral regions. We conclude that, when compared with Poland, Germany remains attractive to Polish workers – particularly to those who are lower-skilled. Polish employees earn less than their German counterparts, suggesting that wage increases may be a potential means of retaining Polish workers in Germany. Network-related characteristics indicate competition effects among Polish workers.