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Flexible Wages or Flexible Workers? A Decomposition of Wage Bill Adjustment by Dutch Firms, 2006–2013

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  • Anja Deelen

    (CPB Netherlands Bureau for Economic Policy Analysis)

Abstract

This paper investigates how firms adjust wages and employment in periods of adverse economic circumstances, using extensive, administrative linked employer–employee panel data for the Netherlands. Changes in the contractual wage bills of firms are decomposed into wages and job flows, distinguishing stayers and workers entering and exiting the firm. Employment reduction is found to be the major channel for wage-bill contraction in adverse periods, especially in firms with a low share of open ended contracts. Continuing workers in firms hit by negative sales shocks generally are assured of wage increases, pointing at a segmented labour market.

Suggested Citation

  • Anja Deelen, 2021. "Flexible Wages or Flexible Workers? A Decomposition of Wage Bill Adjustment by Dutch Firms, 2006–2013," De Economist, Springer, vol. 169(2), pages 179-209, May.
    • Handle: RePEc:kap:decono:v:169:y:2021:i:2:d:10.1007_s10645-021-09382-5
    DOI: 10.1007/s10645-021-09382-5
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    1. Artur Mitsel & Aleksandr Shilnikov & Pavel Senchenko & Anatoly Sidorov, 2021. "Enterprise Compensation System Statistical Modeling for Decision Support System Development," Mathematics, MDPI, vol. 9(23), pages 1-19, December.

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    More about this item

    Keywords

    Wages; Employment flows; Linked employer–employee data;
    All these keywords.

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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