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How Flexible are Wages in EU Accession Countries?

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Author Info
Anna Iara ()
Iulia Traistaru ()

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Abstract

The transition to a market economy and increased economic integration have fostered regional disparities in Central and Eastern European countries. This paper investigates whether and to what extent wages could act as an equilibrating mechanism in these countries by adjusting to local market conditions. Using regional data for the 1990s, we estimate static and dynamic wage curve models for Bulgaria, Hungary, Poland and Romania. We find empirical evidence for a wage curve in Bulgaria, Hungary and Poland suggesting that wages could help equilibrate labour markets following labour demand shocks. In the case of Romania, the unemployment elasticity of pay is not significantly different from zero.

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa04p191.

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Date of creation: Aug 2004
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Handle: RePEc:wiw:wiwrsa:ersa04p191

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  2. Harald Badinger & Thomas Url, 2002. "Determinants of regional unemployment: some evidence from Austria," Regional Studies, Taylor and Francis Journals, vol. 36(9), pages 977-988, December. [Downloadable!] (restricted)
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  8. repec:fth:prinin:343 is not listed on IDEAS
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  18. Ella Kállai & Iulia Traistaru, 1998. "Characteristics and Trends of Regional Labour Markets in Transition Economies:Empirical Evidence from Romania," LICOS Discussion Papers 7298, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
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  20. Pannenberg, Markus & Schwarze, Johannes, 1998. "Labor market slack and the wage curve," Economics Letters, Elsevier, vol. 58(3), pages 351-354, March. [Downloadable!] (restricted)
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  23. Duffy, Fiona & Walsh, Patrick Paul, 2001. "Individual Pay and Outside Options: Evidence from the Polish Labour Force Survey," IZA Discussion Papers 295, Institute for the Study of Labor (IZA). [Downloadable!]
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  26. Robert E. Hall, 1970. "Why Is the Unemployment Rate So High at Full Employment?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 1(1970-3), pages 369-410. [Downloadable!]
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Geraint Johnes, 2005. "The wage curve revisited: estimates from a UK panel," Working Papers 003050, Lancaster University Management School, Economics Department. [Downloadable!]
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  2. Ian Babetskii, 2007. "Aggregate Wage Flexibility in Selected New EU Member States," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  3. Daianu, Daniel & Kallai, Ella, 2008. "Disinflation and Inflation Targeting in Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(1), pages 59-81, March. [Downloadable!]
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