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Looking Inside the Labor Market: A Review Article

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  • Peter Howitt

Abstract

When unemployed workers are available, why don't firms cut wages until the excess supply is eliminated? In his book, Why Wages Don't Fall During a Recession, Truman F. Bewley concludes, based on interviews with managers and labor leaders, that the most important factor inhibiting wage cuts is the psychological factor of morale. Bewley's field research has made an outstanding contribution to our knowledge of labor markets, by providing a close-up view of exactly what happens from the vantage point of the participants.

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Bibliographic Info

Article provided by American Economic Association in its journal Journal of Economic Literature.

Volume (Year): 40 (2002)
Issue (Month): 1 (March)
Pages: 125-138

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Handle: RePEc:aea:jeclit:v:40:y:2002:i:1:p:125-138

Note: DOI: 10.1257/0022051026994
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  1. Richard Rogerson, 2010. "Indivisible Labor, Lotteries and Equilibrium," Levine's Working Paper Archive 250, David K. Levine.
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  10. Fischer, Stanley, 1977. "Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 191-205, February.
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  12. Campbell, Carl M, III & Kamlani, Kunal S, 1997. "The Reasons for Wage Rigidity: Evidence from a Survey of Firms," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 759-89, August.
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