Evaluation of development of employment and labour productivity in 2002-2006 using shift-share analysis

The enlargement of the EU in 2004 considerably increased differences in national production; however differences in regional level were even more significant. 90% of population in new member states live in regions with gross domestic product per head lower than 75% of the EU average; compared to 13% of such regions in the EU15. The shift-share analysis decomposed the dynamics of employment and labour productivity in 2002-2006. The change is distributed into national, proportional, regional and differential component. Regional differences in labour productivity are further assessed by static shift-share analysis. From the point of regional view, there is a significant difference in the labour productivity of the City of Prague and in other regions. This difference is caused by a significant variation in labour productivity of the most important sectors accelerated by high share of some sectors that are important in the capital city. The labour productivity in the capital city is higher by 86% compared to the average of the Czech Republic; labour productivity in other regions is below the average. A two-way analysis of variance of each variable revealed significant differences (α = 0.05) in the relative increments among sectors; differences in relative increments among regions were not proved. A static shift-share analysis proved a significant influence of the productivity differential component that explained 81% of total variability.