Publications - Working Papers IER SAS

The paper works with so-called functional division of income and uses the income categories as they are understand in the system of national accounts. In the Slovak economy such a structure of income was formed, which differs from the usual functional structure of income in the more advanced economies (especially low share of compensation of employees). The aim is to identify the factors for which the share of compensation of employees in the total volume of income in SR is uncommonly low. Literature gives a number of causes of the low wage share; we note that in Slovakia there were many of them present simultaneously. To those which are commonly presented in the literature, we add some specific factors typical for the countries of Central and Eastern Europe (e.g. strong economic growth coupled with over-coming of undercapitalization increased the relative scarcity of capital at the expense of the labor). This will help to partly explain the uncommonly low wage share in Slovakia.