Unit labour costs in Malta: Trends and international comparisons

Grech, Aaron George (2004): Unit labour costs in Malta: Trends and international comparisons.

Abstract

Appraisals of international competitiveness are increasingly focusing on unit labour costs. In this paper, a unit labour costs measure is derived for the Maltese economy for the last two decades. In order to take into account structural shifts, separate indices are also derived for the effective cost of labour in the private and Government sectors, and in manufacturing. These series indicate that unit labour costs in the overall economy rose by 2.3% per annum during the twenty years to 2003, and that the increases registered in the private sector and manufacturing were less pronounced. Malta’s overall unit labour costs were estimated to stand at less than two-thirds of those in the EU-15 and the relativity between manufacturing labour costs in Malta and in Europe seems to have remained virtually stable over the last fifteen years. However since 2000, labour productivity has fallen in Malta, while compensation costs in some sectors have remained on the rise, leading to reduced competitiveness.

• Item Type: MPRA Paper
• Language: English
• Keywords: unit labour cost, labour productivity, cross-country comparisons, sectoral analysis
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O57 - Comparative Studies of Countries; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J30 - General; L - Industrial Organization > L6 - Industry Studies: Manufacturing > L60 - General

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