Do Wages Reflect Growth Productivity – Comparing the European East and West?

Trenovski, Borce; Gligorić, Dragan; Kozheski, Kristijan; Merdzan, Gunter

doi:10.1080/19448953.2023.2167167

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“…The second group encompasses the last EU entrants -Bulgaria, Romania, and Croatia. A segment of the empirical research delves into the developed countries of the EU (Artige & Nicolini, 2006), as well as the countries in both western and eastern Europe (Trenovski et al, 2023;Borović, Tomaš & Trivić, 2023). Additionally, there are empirical studies investigating labor productivity between the USA and Europe (Blanchard, 2004), with some works concentrating on the economic perspectives of the Balkan countries (Sergi, 2001).…”

Section: Methodsmentioning

confidence: 99%

Labor productivity in the selected see countries: Trends and determinants

Trpeski,

Kozheski,

Merdzan

2024

Ekon horizonti

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This study examines labor productivity in the Open Balkan initiative countries (Albania, Serbia, and North Macedonia) and Southeastern Europe's latest EU entrants (Bulgaria, Romania, and Croatia). In the study, macroeconomic and institutional factors, including the Gross National Income (GNI) per capita, the unemployment rate, the statutory minimum wage, and the labor freedom index are analyzed in relation to labor productivity. The study used econometric methods to identify the labor productivity determinants and discern the labor market differences between the two groups of countries. The key findings emphasize the pivotal role of economic development in Southeastern Europe, especially among the last EU entrants, fostering additional increases in labor productivity. The study reveals the significant influence of the labor freedom index on productivity, with nuanced implications for both groups of countries. Additionally, it highlights the tangible impact of the statutory minimum wage policies on labor productivity in the Open Balkan initiative countries, indicating potential shifts in the wage structures and broader economic landscapes. The interplay of variations in the unemployment rate emerges as a substantial factor shaping efficiency and overall productivity in the labor market across both groups. These findings provide valuable insights into the labor market complexities faced by the Open Balkan countries, underscoring the need to bridge the gaps for economic development catch-up.

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Section: Methodsmentioning

confidence: 99%