Real Wages Versus Nominal Wages in the Albanian Economy

Abstract

Nominal wages and real wages differ depending on the place and country. They are affected by many factors such as purchasing power of money, additional benefits received, working hours, job security, nature of employment, future prospects, social view of the job and cost of training. Our analysis is focused on real and nominal wages and factors that have an impact on this wages, in the Albanian economy. In this paper, we are going to analyze the change of average monthly wage in the last ten years in Albania, the change of CPI during the same period of time and the real wage growth impact in the Albanian economy, according to administrative data gained from official sources of information. As the levels of the real wage and employment are determined by labor market equilibrium, our analyzes comes with some valuable conclusions about the importance of strong labor market policies of the Albanian government, in order to help the working force to reach a decent standard of living. Interesting implications are explored for economist and policy makers, in order to assess the impact of unadjusted remuneration in the Albanian economy.

DOI: 10.5901/ajis.2014.v3n2p183