Downward Nominal and Real Wage Rigidity : Survey Evidence from European Firms

We present new evidence from a unique survey of firms across Europe on downward wage rigidity in both real and nominal terms. Our results indicate that wage rigidities are related to workforce composition in a manner that is consistent with related theoretical models. We also find that wage rigidity depends on the labour market institutional environment. Collective bargaining coverage is positively related with downward real wage rigidity, measured on the basis of wage indexation. Downward nominal wage rigidity is positively associated with the extent of permanent contracts and this effect is stronger in countries with stricter employment protection regulations.

Bibliographic Details

Main Authors:	Babecky, Jan, Du Caju, Philip, Kosma, Theodora, Lawless, Martina, Messina, Julian, Room, Tairi
Format:	Journal Article biblioteca
Language:	EN
Published:	2010
Subjects:	Economics of Contract: Theory D860, Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital E240, Wage Level and Structure, Wage Differentials J310, Labor Contracts J410, Labor Law K310,
Online Access:	http://hdl.handle.net/10986/4853
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