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Modelling labour adjustments over the business cycle: evidence from non-linear ARDL model

Karolina Konopczak ()
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Karolina Konopczak: Ministry of Finance in Poland, Postal: ul. Świętokrzyska 12, 00-916 Warszawa,

No 35, MF Working Papers from Ministry of Finance in Poland

Abstract: In this study we propose a novel approach to modelling wage and workforce adjustments in response to business cycle fluctuations, using non-linear cointegration methods. By exploring the sectoral dimension of the data we address the question of interchangeability between wage and employment adjustments. The results obtained for Polish industry show virtually no sign of a trade-off between price and quantity responses. Workforce resilience to demand fluctuations is rather matched with wage rigidity. Conversely, sectors with more flexible wages tend also to be responsive in terms of workforce.

Keywords: Labour adjustments; Wage rigidity; Business cycles; Non-linear cointegration (search for similar items in EconPapers)
JEL-codes: D22 E24 E32 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2019-05-29
New Economics Papers: this item is included in nep-mac
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