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Arms-length influence: Public sector wage setting and export-led economic growth in Czechia and Slovakia

Author

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  • Marta Kahancová
  • Katarína Staroňová

Abstract

Studies on the drivers of public sector wage setting (PSWS) within the broader political and economic conditions in Central and Eastern Europe are scarce. To fill this gap, the paper questions to what extent the export-led growth model, based on foreign direct investment as driver of economic growth, influenced PSWS in Czechia and Slovakia after the 2008–2009 crisis. The paper provides new evidence of the appropriateness of the growth model literature, integrated by consideration of global production chains integration, for understanding PSWS in CEE conditions. The analysis shows that PSWS followed institutional traditions and established practices that only indirectly related to the countries’ export orientation and integration into global production chains. The indirect growth model impact on PSWS in CEE conditions is channeled through a strong role of the statutory minimum wage, which serves as a wage benchmark both for the export sector and PSWS.

Suggested Citation

  • Marta Kahancová & Katarína Staroňová, 2024. "Arms-length influence: Public sector wage setting and export-led economic growth in Czechia and Slovakia," European Journal of Industrial Relations, , vol. 30(1), pages 97-119, March.
    • Handle: RePEc:sae:eurjou:v:30:y:2024:i:1:p:97-119
    DOI: 10.1177/09596801231215901
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    References listed on IDEAS

    as
    1. Marta Kahancová & Monika Martišková, 2023. "Strengthening legislation, weakening collective bargaining? Two faces of trade union strategies in Czechia and Slovakia," European Journal of Industrial Relations, , vol. 29(1), pages 63-81, March.
    2. Besnik Pula, 2018. "What Makes Firms Competitive? States, Markets, and Organisational Embeddedness in Competitive Firm Restructuring in Postsocialist Economies," New Political Economy, Taylor & Francis Journals, vol. 23(4), pages 458-474, July.
    3. Donato Di Carlo, 2020. "Understanding wage restraint in the German public sector: does the pattern bargaining hypothesis really hold water?," Industrial Relations Journal, Wiley Blackwell, vol. 51(3), pages 185-208, May.
    Full references (including those not matched with items on IDEAS)

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