This paper presents empirical analysis of relative wage convergence in the group of 20 countries of enlarged EU (five New Member States: Czech Republic, Poland, Slovakia, Slovenia, Hungary plus former EU15 economies) within the period 1995-2005. The study is based on recently released sector level data (12 manufacturing sectors) which allows us to analyze the convergence process concerning wages of three distinct groups of workers (high-skilled, medium-skilled and low-skilled). Sigma convergence analysis suggests that the biggest dispersion of wages is typical for salaries paid to low-skilled employees. Estimation results of dynamic panel model obtained with GMM (Generalized Method of Moments) estimator indicate that within the group of 20 EU countries taken into consideration a slow process of wage convergence takes place and its speed does not exceed 5% per year. The lowest speed of wage convergence is characteristic for earnings of workers with the lowest educational level.
Financed by the National Centre for Research and Development under grant No. SP/I/1/77065/10 by the strategic scientific research and experimental development program:
SYNAT - “Interdisciplinary System for Interactive Scientific and Scientific-Technical Information”.