J30 - Wages, Compensation, and Labor Costs: GeneralReturn

The study estimates the size of the gender pay gap (GPG) for the Czech Republic in the years 2006-2017 using data from the EU-SILC survey. The size of the GPG (and the related variables) remains relatively time-invariant with a statistically weak relation to the business cycle. Using the Oaxaca-Blinder decomposition, we found out that the unexplained part of the GPG amounts to 50% of the whole GPG (on average) and only one third of the GPG is caused by an endowment effect or an interaction between the endowment effect and the coefficient effect. Selection bias plays a statistically insignificant role in terms of the GPG formation and explanation. Parenthood is the most important driver of the GPG. For parents, the GPG is about 30 percentage points higher than the one for non-parents. Women are able to narrow the GPG created by the effect of motherhood and reach original unexplained levels of approximately 15% after reaching the age of 50 and higher. Besides parenthood, there is no other demographic characteristic that has any substantial impact on the formation and persistence of the GPG. The GPG is most pronounced for the lowest- and the highest-earning quantiles, indicating the existence of a glass ceiling and a sticky floor on the Czech labour market.

This study explores the determinants of sectoral wage dynamics in Croatia, including inter-sectoral wage linkages, using both panel data methods and Granger causality analysis. Given the large deficits in Croatian merchandise trade and accumulated external liabilities, wage formation in the exporting sectors receives a particular focus. It has been found that exporters are wage leaders and that labour productivity is a more important wage determinant for the exporting sectors than for other sectors. Public sector wages do not affect wages in private sectors. There are, however, wage spillovers within the group of exporting sectors and possibly a bi-directional causal relationship between wages in exporting and private sheltered sectors. Thus, some exporting industries may face pressure from wage increases in more successful exporting sectors as well as in private sheltered sectors. A more coordinated wage-setting system could contribute to improving overall export performance and reducing external trade imbalances.

The paper assesses the characteristics of tax wedge, employment and unemployment rate in the EU and by using linear regression analysis with panel-corrected standard errors on the sample of twenty-seven EU Member States over 1999-2008 period analyzes whether the tax wedge affects the employment growth. The empirical estimates have shown that, with regard to employment and unemployment rate, the EU Member States can be classified into two groups. The first group is characterized with high tax wedge, low employment and high unemployment rate, whereas the second group has the alternative characteristics. The negative tax wedge-employment relation was confirmed in the panel regression analysis, showing that an increase in tax wedge for one percentage point decreases the employment growth in the EU-27 by around 0.04 percentage points, ceteris paribus. The empirical estimates suggest that the EU-27 should continue with the trend of reducing tax wedge, as this would increase employment growth and employment rate and decrease unemployment, especially in Member States with high tax wedge.