wage equation labour demand human capital EU enlargement
In this paper we estimate a sectoral real wage equation for three regional blocs of the enlarged EU that we defined as North (wealthiest EU), South (Greece, Portugal and Spain) and East (acceding Central and Eastern European countries). The estimation results show that real wages react
differently in each of the blocs to the impact of market size, location and factor endowments across
a range of industrial sectors which differ by their degrees of economies of scale and skill-intensities
in the presence of transport costs.