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Price, wage and employment response to shocks: evidence from the WDN survey

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Listed:
  • Bertola, Giuseppe
  • Dabusinskas, Aurelijus
  • Hoeberichts, Marco
  • Izquierdo, Mario
  • Kwapil, Claudia
  • Montornès, Jeremi
  • Radowski, Daniel

Abstract

We analyse the relative intensity and character of price vs. cost and wage vs. employment firm-level adjustment to cost-push shocks in the European System of Central Banks Wage Dynamics Network (WDN) survey data set. The results document several statistically significant and theoretically sensible relationships: price increases are less likely when product market competition is more intense, and more likely when collective wage agreements or employment protection legislation constrain firm-level reactions. We discuss how changes of such structural and institutional features of firms and of their environment may underlie the evolution of macroeconomic adjustment mechanisms in Europe.

Suggested Citation

  • Bertola, Giuseppe & Dabusinskas, Aurelijus & Hoeberichts, Marco & Izquierdo, Mario & Kwapil, Claudia & Montornès, Jeremi & Radowski, Daniel, 2012. "Price, wage and employment response to shocks: evidence from the WDN survey," Labour Economics, Elsevier, vol. 19(5), pages 783-791.
    • Handle: RePEc:eee:labeco:v:19:y:2012:i:5:p:783-791
    DOI: 10.1016/j.labeco.2012.03.008
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    More about this item

    Keywords

    Wage bargaining; Labour-market institutions; Survey data; European Union;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • P50 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - General

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