A Statistical Analysis of Productivity and Compensation of Labour in the EU

• Main Author: Vít Pošta
• Format: Article
• Language: English
• Published: Czech Statistical Office 2018-12-01
• Series: Statistika: Statistics and Economy Journal
• Subjects: Compensation; labor productivity; statistical analysis; unit labor costs
• Online Access: https://www.czso.cz/documents/10180/61266315/32019718q4338.pdf/415b665e-4288-46f7-820e-34320426cf75?version=1.2

The presented paper first discusses possible hypotheses on the relationship between compensation and labor productivity, arguing equiproportionality between the two cannot be considered a viable economic hypothesis. The main part of the analysis focuses on the EU countries, presenting a detailed view of the developments in the past twenty years from the point of view of both nominal and real unit labor costs. It shows that the relationship between compensation and labor productivity varies greatly among the economies and no general conclusions may be drawn. In case of the Czech Republic the estimates show that responsiveness of compensation to productivity is relatively high as compared with the EU panel and the growth of compensation surpasses the growth of productivity in both nominal and real terms as compared with the EU or Germany as a benchmark.