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Increasingly unequal? Convergence of real wages in the EU

Edin, Daniel LU (2018) NEKH01 20172
Department of Economics
Abstract
The European union has taken steps to remove obstacles for labor mobility and per neoclassical economic theory this should lead to an equalisation of the real wages through an increase in labor mobility. Real wages is an important indicator of welfare and the equalisation process is called convergence by economists. This thesis looks closer at the convergence process in the European Union during 1997 to 2015 for the EU-27. The topics of interests are; have real wage convergence taken place, is this process affected by the Eurozone crisis and do real wage growth similarities cause countries to group up in so called "Convergence clubs". Classic convergence measurements such as sigma-convergence and beta-convergence is used to measure the... (More)
The European union has taken steps to remove obstacles for labor mobility and per neoclassical economic theory this should lead to an equalisation of the real wages through an increase in labor mobility. Real wages is an important indicator of welfare and the equalisation process is called convergence by economists. This thesis looks closer at the convergence process in the European Union during 1997 to 2015 for the EU-27. The topics of interests are; have real wage convergence taken place, is this process affected by the Eurozone crisis and do real wage growth similarities cause countries to group up in so called "Convergence clubs". Classic convergence measurements such as sigma-convergence and beta-convergence is used to measure the reduction of disparities and the "Catch-up" process of weaker economies. Cluster analysis is employed to identify "convergence clubs" and the more modern time-series approach is used to determine the convergence properties of these clubs. The results indicate that real wage convergence has occurred in the European union during the period of interest. This convergence process was negatively affected by the Eurozone crisis as a result of stalled labor mobility. Two convergence clubs are identified and they consist of a high income club and a low income club. The low income club will not "catch-up" to the real wage level of the high income club. (Less)
Please use this url to cite or link to this publication:
author
Edin, Daniel LU
supervisor
organization
course
NEKH01 20172
year
type
M2 - Bachelor Degree
subject
keywords
real wage convergence, sigma convergence, beta convergence, european union, time-series convergence
language
English
id
8934243
date added to LUP
2018-02-14 18:23:30
date last changed
2018-02-14 18:23:30
@misc{8934243,
  abstract     = {{The European union has taken steps to remove obstacles for labor mobility and per neoclassical economic theory this should lead to an equalisation of the real wages through an increase in labor mobility. Real wages is an important indicator of welfare and the equalisation process is called convergence by economists. This thesis looks closer at the convergence process in the European Union during 1997 to 2015 for the EU-27. The topics of interests are; have real wage convergence taken place, is this process affected by the Eurozone crisis and do real wage growth similarities cause countries to group up in so called "Convergence clubs". Classic convergence measurements such as sigma-convergence and beta-convergence is used to measure the reduction of disparities and the "Catch-up" process of weaker economies. Cluster analysis is employed to identify "convergence clubs" and the more modern time-series approach is used to determine the convergence properties of these clubs. The results indicate that real wage convergence has occurred in the European union during the period of interest. This convergence process was negatively affected by the Eurozone crisis as a result of stalled labor mobility. Two convergence clubs are identified and they consist of a high income club and a low income club. The low income club will not "catch-up" to the real wage level of the high income club.}},
  author       = {{Edin, Daniel}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Increasingly unequal? Convergence of real wages in the EU}},
  year         = {{2018}},
}