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

Do Wages Reflect Growth Productivity – Comparing the European East and West? The research determines the gap (Great Decoupling) between labour productivity and workers’ compensation in the two blocks of EU countries (Western versus Eastern). The division of countries into two groups provides a basis further to determine whether the previous socio-economic and political evolutionary development of these countries blocks still has a significant impact on the functional distribution of national income, on the extent to which labour productivity growth is transmitted to workers. The results are heterogeneous. In the sample of highly developed Western EU countries where higher levels of labour productivity, as well as high levels of technological development, lead to an increase in labour productivity to be followed by a lower increase in workers’ compensation. On the sample of Eastern EU countries, results indicate different relationships and the strength of causality between productivity and labour compensation. Central-East EU countries had a more positive relationship between real workers’ compensation and labour productivity, compared to the Southeast Europe (Balkan) countries where an increase in workers’ compensation causes a reduction in labour productivity. The results also offer a solid basis for understanding wage/income/productivity relationships d for creating policies for a more efficient distribution of national income. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Balkan and Near Eastern Studies Taylor & Francis

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

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References (23)

Publisher
Taylor & Francis
Copyright
© 2023 Informa UK Limited, trading as Taylor & Francis Group
ISSN
1944-8961
eISSN
1944-8953
DOI
10.1080/19448953.2023.2167167
Publisher site
See Article on Publisher Site

Abstract

The research determines the gap (Great Decoupling) between labour productivity and workers’ compensation in the two blocks of EU countries (Western versus Eastern). The division of countries into two groups provides a basis further to determine whether the previous socio-economic and political evolutionary development of these countries blocks still has a significant impact on the functional distribution of national income, on the extent to which labour productivity growth is transmitted to workers. The results are heterogeneous. In the sample of highly developed Western EU countries where higher levels of labour productivity, as well as high levels of technological development, lead to an increase in labour productivity to be followed by a lower increase in workers’ compensation. On the sample of Eastern EU countries, results indicate different relationships and the strength of causality between productivity and labour compensation. Central-East EU countries had a more positive relationship between real workers’ compensation and labour productivity, compared to the Southeast Europe (Balkan) countries where an increase in workers’ compensation causes a reduction in labour productivity. The results also offer a solid basis for understanding wage/income/productivity relationships d for creating policies for a more efficient distribution of national income.

Journal

Journal of Balkan and Near Eastern Studies – Taylor & Francis

Published: Jul 4, 2023

Keywords: Western versus Eastern Europe; Great Decoupling; productivity; compensation; bootstrap panel approach

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