Wage Convergence across European Regions : Do International Borders Matter?

Abstract

This study focuses on wage convergence among the member states of the European Union by addressing three important questions. First, is there average wage convergence in European Union regions? Second, if there is wage convergence, are regional wage levels converging to a single, steady state level (unconditional convergence) or to their own steady state level (conditional convergence)? Third, do international borders matter for average wage convergence? By using a panel data set covering 203 Nomenclature of Territorial Units for Statistics-2 level regions from 1996 to 2006, the present study finds wage convergence for internal regions (regions within the same country) but no evidence of convergence for border regions (neighboring regions across international borders). These results imply that wage convergence is somehow restricted by international borders. These results are robust with both parametric and non-parametric approaches of testing convergence.JEL Classifications: C01, C12, C23, F15, J31

Is There Social or Monetary Dumping in the European Union? Manufacturing Competitiveness in Central and Eastern Europe

“…In this contest of market deregulation, the Eastern EU's enlargement to countries with a poor tradition in 'social modelling' of industrial relations would amplify the problem (Cremers, 2016). This view is supported by the empirical evidence of a slow or null wage convergence among neighbouring regions across international borders within the EU (Naz, Ahmad, & Naveed, 2017). Other authors (Caporaso & Tarrow, 2009;Rubery, 2011;Vaughan-Whitehead, 2015;Athanasenas, Chapsa, & Michailidis, 2015), in contrast, pointed out the gradual convergence process in the definition of common social standards, resulting from the transition to an economic and monetary union equipped with regulatory powers valid for all Member States.…”

Real Wage Convergence in Romania: Empirical Evidence Based on Club Converging

“…Wage convergence was examined in several studies in connection with various economic factors, contexts or perspectives: immigrant wage (Hersch&Schinall, 2018), level of workers' skill (Cai & Du, 2011), European regions or country level (Naz et al, 2017;Ferens, 2015;Brülhart and Koenig, 2006;Rosés and Sánchez-Alonso, 2002), use of advanced Internet technologies (Forman et al, 2012), labor force migration (Enflo et al, 2014), the gender gap in wages (Cha & Vedeen, 2014), trade openness in CEE countries (Egger et al, 2005), historical view on wages (Broadberry and Gupta, 2006). The issue of convergence of real wages across Romanian counties was examined in the study developed by Zaman and Goschin (2014) The present study makes a clear contribution to the existing literature by exploring the club convergence in wages in a case study on Romanian counties.…”

Wage convergence after euro adoption - the case of Slovakia

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