Estimation of relationship between wages and uneployment in Lithuania

Atvirkštinis darbo užmokesčio ir nedarbo ryšys nekelia abejonių. Šį ryšį argumentuoja derybų modelis ir efektyvaus darbo užmokesčio modelis. Analizuojant darbo užmokesčio pokyčio ir nedarbo lygio sąryšį, remiamasi Filipso kreive. Neabejodamos nedarbo ir darbo užmokesčio ryšiu, straipsnio autorės bando jį detalizuoti, atsižvelgdamos į papildomas sąlygas, pavyzdžiui, į nedarbo lygį šalies regionuose ar darbuotojų kvalifikaciją. Šiuo tyrimu siekiama detalizuoti nedarbo ir darbo užmokesčio sąryšį keliant probleminį klausimą: ar darbo užmokesčio lankstumas nedarbo atžvilgiu privačiame ir valstybinime sektoriuose yra vienodas? Tiriamas ir nedarbo bei darbo užmokesčio ryšys, išskiriant nedarbo didėjimo ir mažėjimo laikotarpius. Nustatyta, kad 1998–2010 m. nedarbo lygis paaiškina didelę darbo užmokesčio pokyčių sklaidos dalį tiek valstybės, tiek privačiame sektoriuje, tačiau skirtumai stebimi analizuojant nedarbo didėjimo ir mažėjimo laikotarpius[...] The problem of the research is related to the question of whether wage flexibility in public and private sectors is the same. The aim of the research is to analyze the relationship between unemployment and wages from the theoretical point of view and to estimate and compare it in private and public sectors in Lithuania. The methods applied are scholarly literature logical analysis and synthesis, correlation analysis, regression analysis, comparison and classification. The rate of change in wages in 1998-2010 was analyzed taking into account the level of unemployment. This research highlights that relationship between unemployment and level of wages in Lithuania varies among different periods of the analysis. When unemployment starts rising the wages decrease only after some time. Due to this reason, the statistical relationship between the level of wages and unemployment may vanish. This problem is bypassed when relationship between change in wages and unemployment is analyzed. The strong negative relationship was found between the rate of change in wages and unemployment in both private and public sectors in 1998-2010. During this period the unemployment can explain 95% of variation of changes in wages in private and 86% in public sector. However this relationship does not hold for 2001-2010 when using quarterly data. This can be explained that quarterly data is more sensitive to seasonal fluctuations, impact of other factors on wages and some lag in response of wages to the changes in unemployment. The unemployment level was declining from the fourth quarter of 2001 till the fourth quarter of 2007. While the unemployment was steadily decreasing, the wage growth rate was steadily increasing. However, only moderate and weak relationship between analyzed variables was detected in private and public sectors, respectively. It can be concluded that wages increased when the unemployment decreased, but the impact of other factors (such as labour productivity, inflation, and increase in minimum wage) on the change of wages was greater than the impact of unemployment. The level of unemployment in Lithuania started rising in the fourth quarter in 2007, while the wages declined only in the fourth quarter of 2008 in private sector and in the first quarter of 2009 in public sector. For the limited time period both the level of wages and unemployment were increasing, but it cannot be concluded that there was no reaction in the labour market to the rise in unemployment. When the unemployment increased, the wage growth rate decreased. In the period of unemployment increase, 95% and 62% of the variation in wages' rate of change in public and private sector respectively can be explained by the level of unemployment. However, more evidence was found that the change in wages in private sector is more related to the level of unemployment, than in public sector. This research contributes to the explanation of the trade- off between unemployment and wage showing different patterns in public and private sector