A Shred of Evidence on Theories of Wage Stickiness

Alan S. Blinder and Don H. Choi

No 3105, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: A small interview survey was undertaken to see how actual wage-setters would react to the central. ideas of several economic theories of wage stickiness. Wage cuts were surprisingly prevalent in recent years, despite the booming economy. The strongest finding was that managers believe that perceptions of fairness playa major motivational role in labor markets; and that a "fair" wage policy is a good deal more complicated than simply not cutting wages. We also found substantial evidence for money illusion and against the adverse-selection version of the efficiency wage model.

Date: Written
Note: EFG
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Journal Article: A Shred of Evidence on Theories of Wage Stickiness (1990)
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