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| Author: | Babecký, J. (et al.) |
| Title: | Downward nominal and real wage rigidity: survey evidence from European firms |
| Journal: | Scandinavian Journal of Economics
2010 : VOL. 112:4 p. 884-910 |
| Index terms: | economics surveys European Union companies pay labour markets |
| Language: | eng |
| Abstract: | It is established that the wages of individual workers are only marginally affected, especially downwards, by shocks to their firms. This paper, basing on a survey of firms across Europe, analyzes which firm-level and institutional factors are associated with wage rigidity - in both real and nominal terms. The results suggest that downward wage rigidity is associated with workforce composition at the establishment level in a manner that is consistent with related theoretical models (e.g. efficiency wage theory, insider-outsider theory). It is also found that wage rigidity depends on the labor market institutional environment. Collective bargaining coverage is positively related to downward real wage rigidity, measured on the basis of wage indexation. |
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