Wage Rigidities and Labor Market Adjustment in Europe
Silvia Fabiani (),
Kamil Galuscak,
Claudia Kwapil,
Ana Lamo and
Tairi Room
Journal of the European Economic Association, 2010, vol. 8, issue 2-3, 497-505
Abstract:
Based on an ad hoc firm-level survey on wage and pricing policies conducted in a large number of European countries, this study finds that about 60% of firms change base wages once a year with some clustering of wage changes observed in January. Differences in the frequency of wage changes between firms are mainly attributable to the institutional framework of the labor market in which they operate. There is evidence of both nominal and real downward wage rigidity. Moreover, when facing a negative shock, European firms prefer to reduce the amount of labor rather than cutting wages. Among those that decide to cut wages a majority prefers to cut flexible wage components rather than base wages. The rigidity of base wages is largely explained by fairness and efficiency considerations. (JEL: E24, J30) (c) 2010 by the European Economic Association.
JEL-codes: E24 J30 (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (53)
Downloads: (external link)
http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1542-4774/issues link to full text (text/html)
Access to full text is restricted to subscribers.
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:tpr:jeurec:v:8:y:2010:i:2-3:p:497-505
Access Statistics for this article
Journal of the European Economic Association is currently edited by Xavier Vives, George-Marios Angeletos, Orazio P. Attanasio, Fabio Canova and Roberto Perotti
More articles in Journal of the European Economic Association from MIT Press
Bibliographic data for series maintained by The MIT Press ().