Downward Nominal Wage Rigidity: Unions’ Merit Or Firms’ Foresight?

Alexander Larin ()
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Alexander Larin: National Research University Higher School of Economics

HSE Working papers from National Research University Higher School of Economics

Abstract: This paper investigates the sources of the downward nominal wage rigidity in Russia. The empirical analysis is based on the RLMS-HSE household survey from 2004 to 2013. We show that, in spite of weak labor unions in Russia, the extent of downward nominal wage rigidity is high. Moreover, the probability of a wage freeze is decreasing in firm size and is lower for industries with industry-level tarif agreements. Our ndings present empirical evidence that the main source of the downward nominal wage rigidity is not the labor unions, but firms' voluntary decision to prevent wage cuts, which may cause quits of valuable employees and/or a decrease in their efforts

Keywords: Downward nominal wage rigidity; RLMS-HSE (search for similar items in EconPapers)
JEL-codes: J31 J51 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2014
New Economics Papers: this item is included in nep-cis, nep-hme, nep-lab and nep-tra
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Published in WP BRP Series: Economics / EC, December 2014, pages 1-17

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Persistent link: https://EconPapers.repec.org/RePEc:hig:wpaper:86/ec/2014

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