Anna Dzienis (p)

The publication of the green and white papers on Work 4.0 in Germany launched a discussion on the concept originating from the idea of Industry 4.0 – Work 4.0 and provided an insight into the future work perspectives, scenarios and opportunities. The documents underline that the debate on Work 4.0 is an essential extension of the discussion about the Fourth Industrial Revolution (4IR).

Having in mind that the process of building capacity for the change also contains such components as providing suitable labor force, creating new business solutions and more effective ways of management, this article aims at describing the status quo of the Polish labor market in the perspective of future challenges posed by the digital transformation. By means of various datasets and computation of simple indicators the author seeks an answer to the following question: is the Polish workforce ready for the 4IR?

With a high pupil-to-teacher ratio in primary education and long years of schooling that a child receives, Poland has the potential to develop skills accordingly to the market needs. Moreover, growing activity rate together with augmenting share of people with tertiary education constitute a solid ground for promotion of digital skills. On the other hand, Poland’s manufacturing industry remains below its peers’ productivity levels, with the level of the ICT value added and robot intensity still low.

The paper is organized as follows: first, home and foreign literature concerning the I4 and, more precisely, Work 4.0 problem is revised, then an analysis of the Global Competitiveness Index 4.0 (2018) in the area of human capital and labor market components is conducted. This allows for identifying Poland’s shortcomings and advantages in the before-mentioned fields in relation to other countries, particularly to Germany and the Czech Republic. Finally, the focus is set on Poland`s labor market characteristics depicted in more detail using national and international data.

Toshiyuki Matsuura , Hisamitsu Saito (p)

Inward FDI brings advanced technology into developing countries. Its impact on the host region can be classified into direct and indirect effects. Direct effect refers to the increase in productivity, employment, and wages of foreign-acquired firms. Among indirect effects, previous studies have mostly focused on identification of spillover effects on local wages and productivity of local firms and scarcely studied the impact on employment.

Because of their size and productivity, entry of MNEs should intensify competition in local labor and product markets. If competition effects outweigh spillover benefits in those markets, local wages increase and local firms reduce production, resulting in a decrease in their labor demand. Therefore, whether inward FDI contributes to employment creation by local firms needs empirical evaluation.

In this study, we employ plant-level data in Indonesian manufacturing. Inward FDI has contributed to growth of manufacturing production in Indonesia, but unskilled-intensive output expansion is no longer adequate to maintain its economic growth. Failing to make the transition to skill-intensive production may mire the country in the middle-income trap. Hence, employing microdata, we individually evaluate the impact of inward FDI on wages and employment of skilled and unskilled workers in local firms.

Our results are summarized as follows. First, inward FDI increases local wages, particularly for skilled workers. Second, spillovers from MNEs improve productivity of local plants. Finally, with regard to employment, most local plants increase demand for unskilled workers but reduce that for skilled ones. These results suggest that although spillover effects increase labor demand of local plants, severe labor market competition, along with the inelastic supply of skilled workers, lowers demand for skilled workers.

FDI’s impact on employment differs significantly between low- and high-productivity plants, too. The former tends to reduce both types of employment while the latter tends to increase them. Stated differently, entry of MNEs causes resource reallocation from low- to high-productivity plants. Applying a productivity growth decomposition by Foster et al. (2001), we find resource reallocation considerably contributes to regional productivity growth.

In sum, attracting inward FDI is effective to enhance regional productivity in Indonesia. However, inadequate supply of skilled workers can be a bottleneck to the expansion of production as it cancels out spillover benefits. Moreover, the increased relative wages of skilled workers discourage local firms to adopt skill intensive production. This may reduce the innovation potential of the country and may hamper economic growth in the long-run.

Maryna Tverdostup, Tiiu Paas (p)

This paper investigates the gender wage gap in relation to the multi-dimensional human capital measure across 17 European countries. We employ a definition of human capital, which measures a set of classical and novel human capital components, including (i) formal education degree and field; (ii) total work experience and work experience related to current employment; (iii) cognitive skills in literacy and numeracy domains; (iv) task-specific cognitive and non-cognitive skills, measured by the on-job use of skills and frequency of performing specific job tasks. Up to date, the role of cognitive and task-specific skills have had a limited empirical evidence in the gender wage gap literature. We narrow down this research gap relying on the PIAAC (Program of International Assessment of Adult Competencies) data and applying Gelbach (2016) decomposition methodology. Our study verified that gender human capital gap should be addressed as a multiple of numerous components, which altogether shape human capital profile. However, each component has different valuation on the labour market and, thus, different effect on the gender wage disparity. The analysis revealed that occupation-/industry-specific work experience and task-specific cognitive and non-cognitive skills are the most rewarding human capital attainments. These are also the characteristics revealing systematic male-favouring gender gaps. Literacy and numeracy cognitive skills matter relatively less than their actual on-job use, suggesting that cognitive skills are valued when directly applied and developed at work. Unlike the studies stressing the decreasing importance of human capital in gender wage gap assessment, we argue that human capital cannot be generalized. Therefore, human capital should be viewed as a combination of multiple characteristics and traits, each having specific valuation on the labour market and, thus, particular role in explaining the gender wage gap.