Wages and human capital potential in the Albanian labour market: Comparing Albanian workforce productivity and labour market earnings to those in neighbouring countriesOrion GaroWages and human capital potential in the Albanian labour market

One of the basic tenets of human capital theory, in the domain of labour economics, is that there are two main factors which sustain and enhance worker productivity in the labour market: the individual’s investment in formal education; and the level of on-the-job training. Theoretical common ground among economists with regard to the inclusion of women in the labour force is also that, in developing economies, higher levels of female workforce participation are strongly correlated with higher levels of national welfare; hence, higher average wages. This article is an econometric enquiry intended to determine an average wage level for the countries of central, eastern and south-eastern Europe, controlling for the rate of the population which has secondary education, the percentage of private sector firms offering formal training and the workforce participation gender gap, from which to identify a comparison benchmark for the actual wages received by employees in the Albanian labour market. Such an average wage level may well then serve as a set target towards which local labour market policies might be established and driven.