Downward Wage Rigidity and Alternative Margins of Adjustment : Survey Evidence from European Firms

@inproceedings{Babeck2008DownwardWR,
  title={Downward Wage Rigidity and Alternative Margins of Adjustment : Survey Evidence from European Firms},
  author={Jan Babeck{\'y} and Philip Du Caju and Dora Kosma and Martina Lawless and Juli{\'a}n Messina and Tairi R{\~o}{\~o}m},
  year={2008}
}
  • Jan Babecký, Philip Du Caju, +3 authors Tairi Rõõm
  • Published 2008
It has been well established that the nominal wages of individual workers are very rarely cut. This paper presents new evidence from a unique survey of firms across Europe on the prevalence of downward wage rigidity in both real and nominal terms. Furthermore, we broaden the analysis beyond the issue of flexibility in base wages by examining the use of alternative margins of labour cost adjustment at the firm level. We find that, even in the face of strong downward rigidities in base wages… CONTINUE READING
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