J50 - Labor-Management Relations, Trade Unions, and Collective Bargaining: GeneralReturn

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 fundamental question which we deal with in this paper is: from which sources do organizations in Slovenia most frequently obtain new staff. We questioned 1,075 people who are employed. We discovered that more than 40 % of them became employed through personal contacts. This means that they know someone at the organization they are employed in. This type of employment procedure is not typical in the contemporary world. It was established that those who became employed because of personal contacts are not promoted any faster than those who became employed by normal application procedures. Therefore, the method of recruiting does not influence promotion.