Theoretical and Applied Economics
No. 2 / 2025 (643), Summer
The main drivers of labour cost dynamics in Central and Eastern European countries
National Scientific Research Institute for Labour and Social Protection, Romania
Larisa STĂNILĂ
National Scientific Research Institute for Labour and Social Protection, Romania
Amalia CRISTESCU
National Scientific Research Institute for Labour and Social Protection, Romania
Maria Berta BELU
National Scientific Research Institute for Labour and Social Protection, Romania
Silvana CRIVOI
National Scientific Research Institute for Labour and Social Protection, Romania
Abstract. Labour costs are a fundamental component of production expenses, significantly impacting both the quantity and quality of output. In the current European economic context marked by significant price increases, the paper aimed to empirically investigate the relationship between inflation and labour costs in the short and medium term. We focused on the situation in Romania and three other Central and Eastern European countries: the Czech Republic, Hungary, and Poland. We applied the Granger causality test to determine the direction of causality between the two indicators mentioned. We also performed a regression analysis to gain a more in-depth understanding. The results highlighted the existence of a causal relationship from inflation to labour costs at both aggregate and sectoral levels, with variations across countries and sectors, supporting the hypothesis that inflation precedes increases in labour costs. To explore the determinants of labour costs in more depth, we estimated regression models for three of the analysed countries. The results indicated that past labour cost values, inflation, and labour productivity are the main drivers of labour cost dynamics in Romania, the Czech Republic, and Hungary. Additionally, the share of exports in GDP and the employment rate influence labour costs in Hungary and the Czech Republic, but with distinct country-specific patterns.
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Trending over thinking – quick fame, quiet genius: the bad habits of social media
Understanding the impact of artificial intelligence on the stock market development in BRICS nations: a panel ARDL method
A comparative analysis of development in SAARC countries in the relation of sustainable development – taxonomic analysis
Complementary relationship between foreign direct investment, financial development threshold and economic growth: evidence from Sub-Saharan Africa
Artificial intelligence as a disruptive force in economics: transformations, challenges, and future prospects
The main drivers of labour cost dynamics in Central and Eastern European countries
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