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The Impact of Wage Rate Growth on Tourism Competitiveness

Author

Listed:
  • Kahlil Philander

    (University of Nevada, Las Vegas, 4505 Maryland Parkway, Box 456017, Las Vegas, NV 89154–6107, USA)

  • Susan J. Roe

    (Department of Hospitality and Tourism Management, College of Business, San Francisco State University, 1600 Holloway Avenue, San Francisco, CA 94132, USA)

Abstract

This study tests whether national labour costs affect international competitiveness in the tourism industry. Using a fixed effect model design and two-stage least squares (2SLS) estimation, a set of 40 countries is examined during the period 1990–2010. The study reveals that labour costs may be an important supply-side determinant of tourism expenditures, and supports the hypothesis of a negative relationship between these two variables. Implications of the reported findings for industry and for government macroeconomic policy are provided. Potential extensions of these findings to the tourism area life cycle model are also discussed.

Suggested Citation

  • Kahlil Philander & Susan J. Roe, 2013. "The Impact of Wage Rate Growth on Tourism Competitiveness," Tourism Economics, , vol. 19(4), pages 823-834, August.
    • Handle: RePEc:sae:toueco:v:19:y:2013:i:4:p:823-834
    DOI: 10.5367/te.2013.0226
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    References listed on IDEAS

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    1. Abraham Pizam & Ginger Smith, 2000. "Tourism and Terrorism: A Quantitative Analysis of Major Terrorist Acts and Their Impact on Tourism Destinations," Tourism Economics, , vol. 6(2), pages 123-138, June.
    2. Roger Klein & Francis Vella, 2009. "Estimating the Return to Endogenous Schooling Decisions via Conditional Second Moments," Journal of Human Resources, University of Wisconsin Press, vol. 44(4).
    3. Ashenfelter, Orley & Krueger, Alan B, 1994. "Estimates of the Economic Returns to Schooling from a New Sample of Twins," American Economic Review, American Economic Association, vol. 84(5), pages 1157-1173, December.
    4. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-1160, September.
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    Cited by:

    1. Gore, Surabhi & Borde, Nilesh & Desai, Purva Hegde & George, Babu, 2022. "A Structured Literature Review of the Tourism Area Life Cycle Concept," Journal of Tourism, Sustainability and Well-being, Cinturs - Research Centre for Tourism, Sustainability and Well-being, University of Algarve, vol. 10(1), pages 1-20.

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