Original scientific paper
https://doi.org/10.1080/1331677X.2021.1985564
Innovation and wages constrained with budgetary deficit and unemployment in the European Union countries
Laura Južnik Rotar
orcid.org/0000-0001-9277-8810
Roberta Kontošić Pamić
Štefan Bojnec
Abstract
This paper aims to research the driving forces of wages across
the countries of the European Union (EU-28) during the period
2006-2018. We apply structural equation modelling to analyse
relationships between observed variables and latent variables,
focusing on factors explaining wages. Based on the literature
review, we hypothesized that innovation, budgetary deficit and
the rate of unemployment predict wages across EU-28 countries. Our results suggest that innovation is a significant factor
in explaining wages. The budgetary deficit has a significant
negative impact on wages, while the effect of rate of
unemployment is insignificant. The findings of our research
underline the importance of policies that accelerate the growth
in labour productivity, particularly those which boost innovation
and ensure macroeconomic stability, efficient markets, and an
adaptable and skilled workforce.
Keywords
innovation; wages; labour market; macroeconomic environment; structural equation modelling; European Union
Hrčak ID:
302060
URI
Publication date:
31.3.2023.
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