The Influence of Trade with the EU-15 on Wages in the Czech Republic, Hungary, Poland, and Slovakia between 1997 and 2005

Konstantin Wacker

No 47, FIW Working Paper series from FIW

Abstract: I use the STAN database of the OECD and different econometric methods to investigate the effects of exports towards the EU-15 on wages in the Visegrad countries (CEEC-4; Czech Republic, Hungary, Poland, and Slovakia). The results do not allow to draw any definite statements about this effect. While the impact of exports towards the EU-15 on wages in the countries investigated is likely to be negative in the short run (1-2 years), it seems to be positive in the medium and long run, at least for Hungary and Poland. Nevertheless, it is clear that the pattern of the CEEC-4 exports towards the EU-15 does not correspond with the predictions of the Heckscher-Ohlin model. Therefore, also the theorems of Stolper and Samuelson (1941) and concerning the equalization of factor prices, which are based on the Heckscher-Ohlin model, do not seem accurate to describe the underlying forces linking trade with factor prices. I argue that missing regional and related inter-sectoral labor mobility might be a potential factor preventing employees from taking advantage of trade liberalization. To substantiate this suspicion, however, analysis of more disaggregated data is necessary.

Keywords: panel data; EU enlargement; trade; wages; factor prices; income distribution; Central and Eastern Europe; Visegrad Countries (search for similar items in EconPapers)
JEL-codes: C23 F14 F15 F16 (search for similar items in EconPapers)
Pages: 28
Date: 2010-04
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Citations: View citations in EconPapers (1)

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