Downward Nominal Wage Rigidity in Services: Direct Evidence from a Firm Survey

Daniel Radowski () and Holger Bonin ()
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Daniel Radowski: Deutsche Bundesbank

No 3923, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The paper uses a new German employer survey on wage setting practices to analyze incidence and sources of nominal wage rigidity in services vs. manufacturing. We observe that wage freezes are significantly more frequent and wage cuts less frequent in services. Reasons preventing wage cuts reported by employers suggest that fear of excess worker turnover could explain this distinct behavior.

Keywords: manufacturing and services; efficiency wages; nominal wage rigidity; Germany (search for similar items in EconPapers)
JEL-codes: J31 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2009-01
New Economics Papers: this item is included in nep-cba and nep-lab
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Citations: View citations in EconPapers (8)

Published - published in: Economics Letters, 2010, 106 (3), 227-229

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Journal Article: Downward nominal wage rigidity in services: Direct evidence from a firm survey (2010)
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