J31 - Wage Level and Structure; Wage DifferentialsReturn

In the 1990s, the transition countries in Central and Eastern Europe witnessed an upward trend in returns to education, unlike in Western European countries. This upward trend led to much higher returns than in what was observed in the communist period or compared to the West. The surveys EU-SILC collected since 2005 show that although returns to tertiary education were converging across Europe, there is still a big difference between East and West, with returns considerably higher in the East. Panel analysis reveals also substantial differences in the factors behind returns to tertiary education in the East and the West. The assumed negative relationship between the share of tertiary-educated workers in the working-age population and the returns to tertiary education were confirmed only in the West. The job vacancy rate has a significant negative impact on returns to tertiary education only in the East. While in the West the labour market seems to react more to labour supply, in the East labour demand plays a more important role.

Using data from European Union Statistics on Income and Living Conditions, the study examines the causes of variation in the unexplained gender pay gap among 25 European countries and considers the effect of the legal environment on these. We employ the Oaxaca-Blinder decomposition to estimate the unexplained part of the gender pay gap. To assess the impact of the rule of law on unexplained gender wage differences, we apply a linear regression model, where the estimated unexplained gender pay gap is used as a dependent variable and selected rule of law indicators (specifically the Worldwide Governance Indicators Rule of Law and the Legal System & Property Rights Index) as explanatory variables. Controlling for other institutions affecting gender wage differences (specifically labour market regulation, work-family reconciliation policy and male wage dispersion), we suggest that differences in the quality of legislation and law enforcement across European countries may partly account for the variation in the unexplained gender pay gap. A very progressive improvement in rule of law indices (from the worst to the best among the 25 European countries examined) leads to a decrease in the unexplained gender pay gap by 4.5-5 percentage points.

The main objective of this article is to test the existence of Stolper-Samuelson theorem between Turkey and EU-15 countries for the period 2005-2014. According to the results, a significant relationship is found between exports and real wages especially in the labour and raw intensive sectors of Turkish exports, where Turkey is relatively labour and raw abundant in comparison with the EU-15. Test results indicate a long-run relationship between exports of manufacture of wearing apparel, food, textiles and real wages, a unidirectional Granger causality relationship is found from exports to wages in manufacture of wearing apparel and food. The international trade between Turkey and the EU-15 validates to some extent the Stolper-Samuelson theorem.

The present paper deals with the development of wage distribution by educational attainment in the Czech Republic in the years 2003-2012, analysing fifty wage distributions as the object of research and the gross monthly wage in CZK as the research variable. It examines the development of wage distribution in time and the gross monthly wage in relation to the level of educational attainment. It also pursues the development of the minimum wage in the monitored period. The author pays special attention to the lowest guaranteed wage levels classified according to wage classes and work capability assessment, comparing the minimum wage to the wage of subsistence. The forecasts of future wage distribution are an integral component of the research, the financial standing of Czech households being evaluated in an international context within the European Union.

This paper addresses the question of convergence in real wages across Romanian counties, while putting a spotlight on the recent economic crisis, which has hit hard the entire economy. Following the main methodological trends in the literature, convergence methods were applied using the traditional cross-section approach. The empirical analysis covering a 21-year period provided clear evidence in favour of ß-convergence, but indicated ?-divergence (Galton's fallacy). Wages' dispersion seems to rise during the economic crises and persists in the first stage of recovery as well. This finding provides support to Barro and Sala-i-Martin's theory on the temporary divergence effect induced by economic shocks.

This paper aims to quantify the basic structure of gender wage gaps in the Czech Republic, Hungary, Poland, and Slovakia, using the EU-SILC 2008 dataset. The structure of the gender wage gap is analyzed based on the Heckman selection model and Oaxaca-Blinder decomposition. The findings are to a great extent similar for the Czech and Slovak Republics. The observed gender wage gap is relatively high in these two countries, compared to Hungary and Poland. A relatively small but positive part of the observed gender wage gap can be explained by gender differences in characteristics in the Czech and Slovak Republics, with a high contribution of job characteristics. An opposite result proved in Hungary and Poland, where working women have on average even better characteristics than working men, mainly in terms of individual characteristics.

Because of growing awareness of financial needs for public pensions, attention has been focused on privatisation of the pension systems. While the privatisation of pension funds can encourage development of capital markets in New Member States, equity investment in transition economies is even more volatile than in the ""old"" capitalist countries. Privatised pension system coincides with investment risks, higher administrative costs, and inability of private markets to provide retirees with affordable, indexed and certain annuities. Namely, private sector may not provide enough investment projects to efficiently absorb mandated pension savings and the expected pension income is subject to a number of risks: poor and volatile investment returns, longevity, and inflation eroding the purchasing power of pensions. Indeed, the PAYG system appears to be the only viable system to perform well in terms of risk and volatility of returns.