Wage convergence across European regions: Do international borders matter?

Amber Naz, Nisar Ahmad, Amjad Naveed

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

This study focuses on wage convergence among the member states of the European Union by addressing three important questions. First, is there average wage convergence in European Union regions? Second, if there is wage convergence, are regional wage levels converging to a single, steady state level (unconditional convergence) or to their own steady state level (conditional convergence)? Third, do international borders matter for average wage convergence? By using a panel data set covering 203 Nomenclature of Territorial Units for Statistics-2 level regions from 1996 to 2006, the present study finds wage convergence for internal regions (regions within the same country) but no evidence of convergence for border regions (neighboring regions across international borders). These results imply that wage convergence is somehow restricted by international borders. These results are robust with both parametric and non-parametric approaches of testing convergence.

Original languageEnglish
Pages (from-to)35-64
Number of pages30
JournalJournal of Economic Integration
Volume32
Issue number1
DOIs
Publication statusPublished - Mar 1 2017

Keywords

  • Average wage
  • Border regions
  • Convergence
  • Factor mobility
  • Panel unit root test

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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