TY  - RPRT
        AU  - Ordóñez, Javier
AU  - Sala, Hector
AU  - Silva, José I.
        TI  - Real Unit Labour Costs in Eurozone Countries: Drivers and Clusters
        PY  - 2014/Jun/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 8258
        UR  - https://www.iza.org/publications/dp8258
        AB  - We examine the trajectories of the real unit labour costs (RULCs) in a selection of Eurozone economies. Strong asymmetries in the convergence process of the RULCs and its components – real wages, capital intensity, and technology – are uncovered through decomposition and cluster analyses. In the last three decades, the PIIGS (Portugal, Ireland, Italy, Greece, and Spain) succeeded in reducing their RULCs by more than their northern partners. With the exception of Ireland, however, technological progress was weak; it was through capital intensification that periphery economies gained efficiency and competitiveness. Cluster heterogeneity, and lack of robustness in cluster composition, is a reflection of the difficulties in achieving real convergence and, by extension, nominal convergence. We conclude by outlining technology as the key convergence factor, and call for a renewed attention to real convergence indicators to strengthen the process of European integration.
        KW  - capital intensity
KW  - real wages
KW  - Eurozone
KW  - real unit labour costs
KW  - technology
        ER  -