Non-standard Employment and Wages Across Sectors in Croatia

Abstract

Recent trends of rapid globalization and digitalization have influenced national labor markets, changing the nature of work and increasing non-standard forms of employment. Non-standard forms of employment, such as temporary, part-time, or casual work, are seen as a precarious and may influence earnings. Croatia is no exception from these trends. In the last fifteen years, the service sector due to the high increase of activities in tourism has been growing intensively, becoming the main diver of the Croatian economy. However, large servitization implies the growth of temporary employment, with pronounced seasonality during the peak of tourist season. The aim of this paper is to analyze the trends of non-standard employment and wages across sectors in Croatia for the period from 2008 to 2018. The main research question is whether changes in the structure of job types (from standard to non-standard) influenced wage growth in different sectors, listed by NACE2. Two datasets are used in order to perform panel model. The results suggest the existence of a rapid increase in temporary employment and precarious employment in all sectors of economy accompanied by the stagnation of wages or low increase in wages. However, the situation was slightly improved in 2018 since the majority of industries experienced an increase in wages. Furthermore, empirical results suggest that there is a statistically significant and positive relationship between temporary, especially, precarious employment and wage growth. Accordingly, an increase in the share of temporary and precarious employment has an impact on the monthly wages growth across sectors in Croatia.