Labour productivity and wages in the Republic of Macedonia

Abstract

The relationship between wage and labor productivity is very frequent and receives a special treatment in economic theory and practice. The purpose of this paper is to explore the relationship and interdependence between net-wage and labor productivity in the Republic of Macedonia during the period 1995-2007. The objects of analysis are the relations between the two variables on aggregate level of the Macedonian economy, as well as for certain economic sectors separately (industry, mining and water management; agriculture, fishing and forestry; construction; transport and communications; trade and financial services). Based on the results from the performed analysis, the paper reveals how and to what extent changes in real net-wage influence the changes in labor productivity in Macedonia, on aggregate level and in the observed sectors.