| Abstract: |
Abstract The phenomenon of the Wage curve, discovered by Blanchflower and Oswald, has shown a remarkable persistence in time and across different countries. It relates the regional unemployment rate negatively to the absolute level of wages. This work examines the presence of the wage curve in the Czech Republic by two different models using district level data. A panel model is constructed for 2008-2017 and a cross-sectional model with additional control variables is specified for 2011. The data on average wage in this work are related to specific employees with multiple sources of income. The wage curve is then found with a coefficient of -0.42 for the longitudinal analysis and -0.78 for isolated cross- section. However, after including fixed regional effects in the panel model, the wage-unemployment elasticity diminishes to zero. The other part of this work studies the convergence in the Czech Republic district wage levels. By means of σ and β convergence indicators, it is concluded that the wages converged in the period of 2008-2017, with a faster rate in years 2013-2017. JEL Classification J22, J31, J51, R15 Keywords Wage curve, Unemployment, Regional wage, Czech Republic, Labor economics, Wage conver- gence Title The Wage Curve and Regional Salary Differen- tials in the Czech Republic Author’s e-mail ivan.trubelik@email.cz Supervisor’s e-mail martina.mysikova@centrum.cz |
