Downward wage rigidity for different workers and firms: an evaluation for Belgium using the IWFP procedure

Philip Du Caju, Catherine Fuss and Ladislav Wintr

No 124, Working Paper Research from National Bank of Belgium

Abstract: This paper evaluates the extent of downward nominal and real wage rigidity for different categories of workers and firms using the methodology recently developed by the International Wage Flexibility Project (Dickens and Goette, 2006). The analysis is based on an administrative data set on individual earnings, covering one-third of employees of the private sector in Belgium over the period 1990-2002. Our results show that Belgium is characterised by strong real wage rigidity and very low nominal wage rigidity, consistent with the Belgian wage formation system of full indexation. Real rigidity is stronger for white-collar workers than for blue-collar workers. Real rigidity decreases with age and wage level. Wage rigidity appears to be lower in firms experiencing downturns. Finally, smaller firms and firms with lower job quit rates appear to have more rigid wages. Our results are robust to alternative measures of rigidity

Keywords: wage rigidity; matched employer-employee data. (search for similar items in EconPapers)
JEL-codes: J31 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2007-12
New Economics Papers: this item is included in nep-bec and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (49)

Downloads: (external link)
https://www.nbb.be/doc/ts/publications/wp/wp124en.pdf (application/pdf)

Related works:
Working Paper: Downward wage rigidity for different workers and firms: an evaluation for Belgium using the IWFP procedure (2007)
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:nbb:reswpp:200712-21

Access Statistics for this paper

More papers in Working Paper Research from National Bank of Belgium Contact information at EDIRC.
Bibliographic data for series maintained by ().