The analysis, based on a Polish national sample from 2006, aims to cast light on the regional variation in the effect of education on incomes. Building on the conceptual framework developed in the theory of human capital we investigate to what extent pay-offs for human capital differ across detailed administrative districts in Poland. By incorporating contextual characteristics, we examine how micro- and macro-level factors shape labour market outcomes. Our findings provide further support for the hypothesis that there is much regional variation in the influence of education on incomes, which suggests that there are better and worse places for the development of a meritocratic distribution of incomes. It appears that education pays more highly in more economically-developed regions, marked by a higher rate of occupational activity.
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