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Wage Dynamics in Bulgaria: Co-movement and Causality

Author

Listed:
  • Hristina Manolova

    (American University in Bulgaria)

  • Aleksandar Vasilev

    (American University in Bulgaria)

Abstract

Motivated by recent debates on the possible role of wages as an income policy tool, in this study we examine the dynamic inter-relationship between wages in Bulgaria, mainly in the context of its EU accession. Relative to the WDN studies on the other EU member states, the novelty in this paper is the inclusion of the minimum wage as a possible conditional determinant of the other two wages. We demonstrate that minimum wage increases do not cause changes in average wages in either the government or the private sector. Using variety of econometric tests, we also demonstrate the leadership of private sector wage over public compensation and recommend the implementation of policy measures aimed at labor productivity growth.

Suggested Citation

  • Hristina Manolova & Aleksandar Vasilev, 2017. "Wage Dynamics in Bulgaria: Co-movement and Causality," Bulgarian Economic Papers bep-2017-08, Faculty of Economics and Business Administration, Sofia University St Kliment Ohridski - Bulgaria // Center for Economic Theories and Policies at Sofia University St Kliment Ohridski, revised Sep 2017.
    • Handle: RePEc:sko:wpaper:bep-2017-08
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    File URL: https://www.uni-sofia.bg/index.php/eng/content/download/180267/1253496/file/BEP-2017-08.pdf
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    Cited by:

    1. is not listed on IDEAS
    2. Aleksandar Vasilev, 2022. "Optimal fiscal policy in a model with efficiency wages: the case of Bulgaria," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 50(2), pages 195-209, September.
    3. Aleksandar Vasilev, 2022. "Optimal fiscal policy in a model with reciprocity in labor relations: the case of Bulgaria," Journal of Economic and Administrative Sciences, Emerald Group Publishing Limited, vol. 41(1), pages 357-370, August.

    More about this item

    Keywords

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    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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