The impact of labor productivity on wages in the EU

Abstract

The relationship between labor productivity and wages in the EU as a whole, as well as in comparative terms between old and new Member States is analyzed. Although the theoretical basis for such a study well known, some recent empirical studies put forth the need to rethink this relationship in the period after the crisis. In this regard, a result that is new to the Bulgarian literature has been drawn up with the help of modern panel econometric methods, which shows that there is an asymmetry in the relationship between labor productivity and wages before and after the global financial and economic crisis of 2007-2009. In addition, a further explanation of the asymmetry between labor productivity and wages, as found in the literature, is provided.