Labor market flows, labor productivity, and wages in Slovenia

Labor market flows, labor productivity, and wages in Slovenia are analyzed using macroeconomic and firm-level survey evidence. A decline in. employee numbers is confirmed, but a shortage of qualified applicants is the major obstacle to creating jobs or filling vacancies, suggesting a mismatch in the labor market. The employee's personal qualification in terms of quality of human capital is recorded as the most important single factor in wage determination. The gap in labor productivity between Slovenia along with other analyzed Central and East European economies and Germany is clearly confirmed The increase in labor productivity only partly explains real wage increases in Slovenia, suggesting an important role of other, unexplained factors in wage formation during transition and adjustment toward European Union membership.