Assessment of a Stimulating Effect of Wages on Economic Growth of Border Regions of Poland and Ukraine

Abstract

The purpose of research is to carry out an analysis of trends and an assessment of a stimulating effect of a change in wage on economic growth in border regions of Poland and Ukraine, in particular, in Lublin Voivodeship and Volyn Oblast. An analysis is carried out, of a change in the average monthly wage indicators and gross regional product per person starting from 2004, when Poland became a member of the European Union and the first “orange” revolution took place in Ukraine. For a long period of 2004–2020, positive trends of a change in these indicators are identified. In Poland, only positive trends were observed, while in Ukraine only in the period of the 2009 economic crisis their slight decline was received. According to the results of research of the wage trend in border regions by purchasing power parity, it is identified that a real wage in Poland is more than twice as high as in Ukraine, but this ratio gradually decreases. Based on constructed regression models, it is identified that an average monthly wage indicator increase is a catalyst of the practically proportional gross regional product growth per person both in Lublin Voivodeship and in Volyn Oblast. A conclusion was made that a regional socioeconomic policy must be aimed at providing permanent growth of the average wage level and wage de-shadowing. This will also promote balancing of regional labor markets from own resources and highly-skilled labor force migration process regulation.