The missing link between wages and labour productivity in tourism: evidence from Croatia and Slovenia

Abstract

The present article aims to analyse wage-labour productivity causalities in Croatia and Slovenia using cointegration methods based on monthly time series data of variables for labour productivity and real gross wages in tourism industry during the period December 1999-January 2020. The data vector is integrated by chain indices with the constant base January 2000 ¼ 100. A stochastic trend and shocks are covered in the analysis. Shocks are linked to the European Union accession, and economic crisis following with overwhelmed tourist arrivals. The contribution of the research is two-fold. First, the equations for at most normal distributed variables of labour productivity and real wages in tourism are exposed. Three spatial cointegration relations confirm labour productivity integrity of the regional tourism market. Second, pair-wise causalities indicate one cointegrated vector for labour productivity, which drives real gross wages in tourism sub-industries. These results suggest that for a higher non-seasonal assessment of real gross wage, the labour productivity should rise, i.e. less workers, more robotization or more tourist arrivals with better quality solutions. These findings are at most important to be implemented after the COVID-19 infection crisis with expected restructurings and digital transformation in the tourism industry.

Tourism-led economic growth in Montenegro and Slovenia

“…In a recent study, cointegration methodologies have been applied to the research of relationships between tourist arrivals and economic growth. In the article, as first descriptive statistics, second Granger representation theorem (Gri car et al, 2020;Johansen & Tabor, 2017):…”

Recent trends in labor productivity

“…The issues of the dependence between labor productivity and wages do not lose their relevance as well. The considerable attention of the world academic community paid to this area fully confirms this statement (Gardiner et al, 2020;Gricar et al, 2020;Kong et al, 2020). Thus, Gardiner et al (2020) have investigated regional differences in labor productivity and found that they depend greatly on employees' wages.…”

“…Thus, Gardiner et al (2020) have investigated regional differences in labor productivity and found that they depend greatly on employees' wages. Gricar et al (2020) have analyzed the causal relationship between wages and labor productivity. Their results for the tourism industry show that labor force efficiency must increase in line with the rise in real wages.…”

“…As a result, she suggests that such a global event as the 2020 coronavirus outbreak can only strengthen the interest in modeling trade diversification as a key factor in countries' vulnerability to external shocks (Parteka, 2020). Another study carried out against the COVID-19 backdrop by Gricar et al (2020) outlines causal relationships between wages and labor productivity in Croatia and Slovenia. This work used cointegration methods based on data from monthly time series of labor productivity variables and real gross wages in the tourism during December 1999-January 2020.…”

Sustainable Determinants That Affect Tourist Arrival Forecasting

“…Moreover, the 17 Sustainable Development Goals (SDGs) were adopted by the United Nations in 2015 as a universal call to action to end poverty, protect the planet and ensure that by 2030 all people enjoy peace and prosperity [34]. Some forms of tourism associated with the SDGs, such as low-carbon tourism [34][35][36], nomadic tourism [37][38][39], individual tourism with discrete individual tourist systems [40] and sustainable tourism [41,42], are used as independent variables in this study, while tourist arrivals are the dependent variable [43]. In analysing Croatian and Slovenian [43] tourism further development in the long run [44][45][46], the imperishable employees, as well as the tourism science competencies and the everlasting tourist should be considered as key elements where a shock [47] or an interruption of rain [48] or a crisis [49] should not be crucial development issues.…”