Aggregate Wage Flexibility in Selected New EU Member States 13
A finding of limited aggregate wage flexibility in the new member states is not new in the
literature. For example, RadziwiH and Walewski (2003) analyze labor market adjustment in six
Eastern European countries, using quarterly data over 1995-2002. The episodes of real wage
adjustment to unemployment are identified as being 1997-1998 for the Czech Republic, 1999 for
Slovakia, and the pre-2000 period for Lithuania. No significant periods of real wage adjustment
are reported for Hungary, Latvia, and Poland. This is also a pattern we can see from the estimates
for the two sub-periods shown in Table 3.
Table 3: Elasticity of Wages to the Unemployment Rate, time-series estimates
|
CE-4 |
________________ERM-II |
_______________EMU-3________ | ||||||
|
95-99 |
00-04 |
95-99 |
00-04 |
95-99 |
00-04 | |||
|
CZ |
-0.154*** |
-0.017 |
ES |
0.001 |
-0.042 |
AT |
0.002 |
-0.017 |
|
HU |
0.11 |
-0.43 |
LA |
0.049 |
-0.038 |
GR |
-0.302* |
-0.278 |
|
PL |
-0.129 |
0.047 |
LI |
-0.113* |
-0.004 |
PT |
-0.001 |
-0.015 |
|
SK |
-0.117** |
0.116 |
SL |
-0.097 |
-0.053 | |||
Note: OLS estimates of eq. (1) with White heteroscedasticity consistent standard errors.
***, **, * denote 1%, 5% and 10% significance levels.
Table 4a: Elasticity of Wages to the Unemployment Rate, panel estimates
Dependent variable: growth rate of nominal wages
Regressors:
|
95-99________ |
00-04_________ | |
|
dU |
-0.136 *** |
0.015 |
|
ERM*dU |
0.067 * |
-0.020 |
|
gCPI(-1) |
0.239 *** |
0.031 |
|
gPROD |
0.116 |
-0.066 |
|
Country Fixed Effects* |
** | |
|
_CZ--C |
0.028 |
0.018 |
|
_HU--C |
0.026 |
0.028 |
|
_PL--C |
0.031 |
0.012 |
|
_SK--C |
0.021 |
0.020 |
|
_ES--C |
0.033 |
0.026 |
|
_LA--C |
0.022 |
0.019 |
|
_LI--C |
0.021 |
0.010 |
|
_SL--C |
0.021 |
0.021 |
|
N obs. |
157 |
160 |
|
Adj. R- | ||
|
sq. |
0.24 |
0.16 |
|
F-stat |
5.54 *** |
3.75 *** |
|
Durbin-Watson stat |
2.19_________ |
2.23___________ |
Note: Fixed effects estimates of eq. (3) with White heteroscedasticity consistent standard errors. ***
**, * denote 1%, 5% and 10% significance levels.