Average wage dynamics modelling in view of treshold effects

Abstract

One of the main indicators of the country's economy condition and the well-being of the population is the indicator of the average wage in the country. Modeling the dynamics of this indicator allows to assess trends and predict further downturns and rising of the population purchasing power, changes in the level and quality of the population life. The dynamics of changes in the average wage in the country reflects the situation in the economy and is formed by the market laws of supply and demand. The direct influence of the state on the formation of wages in the country occurs through the payment of wages in state-owned enterprises and institute of minimum wage. The quality of threshold models for predicting the values of average wages in Ukraine is generally higher than models without threshold effects. The simulation results suggest that there are more than two modes in the functioning of the average wage formation system in Ukraine during the study period.