Are real wages rigid downwards?

Steinar Holden and Fredrik Wulfsberg

No 2007/01, Working Paper from Norges Bank

Abstract: This paper explores the existence of downward real wage rigidity (drwr) in 19 OECD countries, over the period 1973–1999, using data for hourly nominal earnings at industry level. Based on a nonparametric statistical method, which allows for country and year specific variation in both the median and the dispersion of industry wage changes, we find evidence of some downward rigidity of real wages in oecd countries overall, as well as for regions and time periods. There is some evidence that real wage cuts are less prevalent under strict employment protection legislation and high union density. Generally, we find stronger evidence for downward nominal than for downward real wage rigidity.

Keywords: Downward real wage rigidity; OECD; Employment protection legislation; Wage setting (search for similar items in EconPapers)
JEL-codes: C14 C15 E31 J3 J5 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2007-04-11
New Economics Papers: this item is included in nep-cba, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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https://www.norges-bank.no/en/news-events/news-pub ... apers/2007/WP-20071/

Related works:
Working Paper: Are Real Wages Rigid Downwards? (2007)
Working Paper: Are real wages rigid downwards? (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:bno:worpap:2007_01

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