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Unit labour costs in Malta: Trends and international comparisons

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  • Grech, Aaron George

Abstract

Appraisals of international competitiveness are increasingly focusing on unit labour costs. In this paper, a unit labour costs measure is derived for the Maltese economy for the last two decades. In order to take into account structural shifts, separate indices are also derived for the effective cost of labour in the private and Government sectors, and in manufacturing. These series indicate that unit labour costs in the overall economy rose by 2.3% per annum during the twenty years to 2003, and that the increases registered in the private sector and manufacturing were less pronounced. Malta’s overall unit labour costs were estimated to stand at less than two-thirds of those in the EU-15 and the relativity between manufacturing labour costs in Malta and in Europe seems to have remained virtually stable over the last fifteen years. However since 2000, labour productivity has fallen in Malta, while compensation costs in some sectors have remained on the rise, leading to reduced competitiveness.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 33666.

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Date of creation: Aug 2004
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Handle: RePEc:pra:mprapa:33666

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Related research

Keywords: unit labour cost; labour productivity; cross-country comparisons; sectoral analysis;

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  1. Grech, Aaron George, 2003. "Assessing employment in Malta," MPRA Paper 33380, University Library of Munich, Germany.
  2. Grech, Aaron George, 2003. "Employment and the labour input in the Maltese economy," MPRA Paper 33383, University Library of Munich, Germany.
  3. van Ark, Bart, 1998. "Productivity," Journal of the Japanese and International Economies, Elsevier, vol. 12(2), pages 171-174, June.
  4. Gropp, Reint & Kostial, Kristina, 2000. "The disappearing tax base: is foreign direct investment eroding corporate income taxes?," Working Paper Series 0031, European Central Bank.
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