On Sand and the Role of Grease in Labor Markets: How Does Germany Compare?

Jörg Decressin and Anja Decressin

No 2002/164, IMF Working Papers from International Monetary Fund

Abstract: This paper investigates wage setting in (west) Germany using the German Socioeconomic Panel dataset on individuals and compares the findings with those available for the United Kingdom and the United States. The fraction of job stayers in (west) Germany who suffer unchanged wages or wage cuts compares with that in similar data for the Anglo-American countries, even after various adjustments for potential reporting errors. While nominal wages of job stayers are rigid downward, real wages are not. Nevertheless, the macroeconomic effects of the nominal rigidity are limited and cannot be weakened substantially by raising inflation.

Keywords: WP; wage change; change distribution; civil servant; wage growth; Wage Setting; Wage Rigidities; Inflation Targets; base pay; wage cut; job stayer; wage data; wage decline; wage rigidity; Wage adjustments; Wages; Real wages; Inflation; Civil service (search for similar items in EconPapers)
Pages: 37
Date: 2002-09-01
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Citations: View citations in EconPapers (9)

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