engleski

Spatial determinants of sectors wage inequalities: Analysis for the region of Croatia

Regional disparities within the countries appear to persist or even to grow. One of the most important indicators of the disparities is regional wage level. It is widely accepted that spatial effects have a different impact among sectors in developed countries. The traditional core-periphery pattern of manufacturing is weakening which tends to work towards regional convergence. On the other hand, service industries continue to concentrate in high-density areas thus reinforcing divergence. Compared to developed, less developed countries have different economic path. Thus, it is reasonable to test the influence of spatial effects among sectors for a less developed country such as Croatia. This paper uses NUTS3 sub-regional data for Croatia to investigate the sources of the regional wages differences on the sector level from year 2000 forward. The recent literature recognizes two main determinants of spatial differences in wages ; namely, the productivity and occupational composition. Therefore the paper uses shift-share analysis to decompose the spatial variation of wages into productivity effect and occupational composition effect exploring how the spatial variance in wages is attributable to variations in these effects among different sectors. In the last step of the paper we examine the relationship between these two determinants of spatial differences and the proximity to economic mass instrumented by different measures of urbanization in the NUTS3 sub-regions. The aim of the paper to explore a new role of government and institutions in regional policy making, taking into account different paths of influence of government and public institutions on productivity and on occupational composition among different sectors.

wages; sector composition index; agglomeration economies; Croatia

Napomena: Navedeni rad je objavljen pod nazivom Wage inequalities and agglomeration in Croatia: Who’s to blame?, Regional and Sectoral Economic Studies (RSES). Vol. 12-2. July-December of 2012