Labour Share Convergence in the European Union

Anatolijs Prohorovs and Julija Bistrova ()
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Anatolijs Prohorovs: Faculty of Business and Economics, Economics and Finance Department, RISEBA University of Applied Sciences, 3 Meža Street, LV-1048 Riga, Latvia
Julija Bistrova: Faculty of Engineering Economics and Management, Department of Corporate Finance and Economics, Riga Technical University, 6 Kalnciema Street, LV-1048 Riga, Latvia

Economies, 2022, vol. 10, issue 9, 1-21

Abstract: The article examines the issue of labour share convergence between Western Europe (EU15) and Central and Eastern Europe (EU11). The results of our research show that for the period of 2009–2018, the convergence of labour share between the EU11 and the EU15 at the aggregate level was almost 40%. At the sectoral level, convergence of labour share between the EU11 and the EU15 occurred in three of the four main sectors—manufacturing, services, and construction—while there was a divergence in the trade sector. At the sectoral level, the highest level of convergence occurred in manufacturing—over 89.7%. In the service sector, the convergence of labour share was almost 45%, but this was mainly due to the fact that in the information and communication industry, the convergence was almost 87.8%. We have determined that for a number of sectors and industries there is an inverse relationship between the level of labour share and its dynamics, which influences the convergence of labour share between the EU11 and the EU15. We also determined that during the period under review, the level of convergence of labour share between the EU11 and the EU15 was five times higher than the level of convergence of the economy and ascertained the main reasons for the labour share convergence being higher than the economy convergence.

Keywords: labour share convergence; personnel cost; Central and Eastern Europe; Western Europe (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jecomi:v:10:y:2022:i:9:p:207-:d:901008

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