Dependent Market Economies and Wage Competition in Central and Eastern Europe

  • Jan DrahokoupilEmail author
  • Agnieszka Piasna
Part of the International Political Economy Series book series (IPES)


Wages in Eastern Europe are much lower than wages in Western Europe. The large differences remain also if we adjust for differences in price levels. This chapter assesses the extent to which wage differences between East European countries and Germany can be explained by differences in productivity and other economic fundamentals in individual countries. We compare the residual country effects on wages, including also effects of wage-setting institutions that remain once we control for labour force compositions and differences in economic structures. The negative country-wage effects in Eastern European countries, in fact, increase once we control for labour force compositions and differences in economic structures. We also decompose the returns effect for occupational groups and sectors, distinguishing the interaction between occupation and sectors and countries.


Wages Central and Eastern Europe Labour markets Labour productivity 


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Copyright information

© The Author(s) 2019

Authors and Affiliations

  1. 1.European Trade Union Institute (ETUI)BrusselsBelgium

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