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Do Sticky Wages Matter? New Evidence from Matched Firm-Survey and Register Data

Anne Kathrin Funk and Daniel Kaufmann ()

No 20-480, KOF Working papers from KOF Swiss Economic Institute, ETH Zurich

Abstract: This paper provides novel evidence on downward nominal wage rigidities and their allocative effects in Switzerland. We match individual wages from a bi-annual firm survey with information on annual income and employment from social security register data. We find relevant downward nominal wage rigidities in the base wage, which accounts for more than 90% of employment income. We then identify the allocative effects of downward nominal wage rigidities on income and employment after an unexpected 1% decline of the consumer price level. Base wage rigidities cause a decline of aggregate income (-0.39%) and employment income (-0.97%), as well as an increase of unemployment (2.11%).

Keywords: : Downward nominal wage rigidity; income; unemployment; deflation (search for similar items in EconPapers)
JEL-codes: E30 E40 E50 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2020-06
New Economics Papers: this item is included in nep-mac
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

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https://doi.org/10.3929/ethz-b-000420479 (application/pdf)

Related works:
Journal Article: Do Sticky Wages Matter? New Evidence from Matched Firm Survey and Register Data (2022) Downloads
Working Paper: Do Sticky Wages Matter? New Evidence from Matched Firm-Survey and Register Data (2020) Downloads
Working Paper: Do sticky wages matter? New evidence from matched firm-survey and register data (2020) Downloads
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