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Downward Nominal Wage Rigidity in Europe: An Analysis of European Micro Data from the ECHP 1994-2001

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  • Knoppik, Christoph
  • Beissinger, Thomas

Abstract

This paper substantially extends the limited available evidence on existence and extent of downward nominal wage rigidity in the European Union and the Euro Area. For this purpose we develop an econometric multi-country model based on Kahn�s (1997) histogram-location approach and apply it to employee micro data from the European Community Household Panel (ECHP) for twelve of the EU�s current member states. Our estimates for the degree of downward nominal wage rigidity on the national as well as the EU-wide level point to marked downward nominal wage rigidity within the European Union. Dieser Beitrag liefert eine erhebliche Erweiterung der bislang nur spärlich vorhandenen Evidenz zum Ausmaß der Abwärtsnominallohnstarrheit in der Europäischen Union und im Eurogebiet. Zu diesem Zweck wird auf Basis des Histogram-Location-Approach von Kahn (1997) ein ökonometrisches Mehrländermodell entwickelt und auf die Daten des Europäischen Haushaltspanels für zwölf EU-Mitgliedsländer angewandt. Die Schätzergebnisse deuten sowohl auf nationaler als auch auf europäischer Ebene auf ausgeprägte Abwärtsnominallohnstarrheit hin.

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Bibliographic Info

Paper provided by University of Regensburg, Department of Economics in its series University of Regensburg Working Papers in Business, Economics and Management Information Systems with number 402.

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Date of creation: 2005
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Handle: RePEc:bay:rdwiwi:462

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Keywords: Lohnstarrheit ; Europäische Union ; Europäische Union / Währungsunion / Mitgliedsstaaten ; Lohnbildung ; Nominallohn ; Rigidität; Abwärtsnominallohnstarrheit ; Europäisches Haushaltspanel ; ECHP ; Lohnrigidität ; Histogram-Location-Ansatz; Downward Nominal Wage Rigidity ; Wage Stickiness ; European Comunity Household Panel ; European Union ; Euro Area;

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  1. Knoppik, Christoph & Beissinger, Thomas, 2005. "Downward Nominal Wage Rigidity in Europe: An Analysis of European Micro Data from the ECHP 1994-2001," University of Regensburg Working Papers in Business, Economics and Management Information Systems 402, University of Regensburg, Department of Economics.
  2. Louis N. Christofides & Man Tuen Leung, 2003. "Nominal Wage Rigidity in Contract Data: A Parametric Approach," Economica, London School of Economics and Political Science, vol. 70(280), pages 619-638, November.
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  6. Holden, Steinar & Wulfsberg, Fredrik, 2004. "Downward Nominal Wage Rigidity in Europe," Memorandum 08/2004, Oslo University, Department of Economics.
  7. Michał Brzoza-Brzezina & Jacek Socha, 2007. "Downward nominal wage rigidity in Poland," National Bank of Poland Working Papers 41, National Bank of Poland, Economic Institute.
  8. Franco Peracchi, 2002. "The European Community Household Panel: A review," Empirical Economics, Springer, vol. 27(1), pages 63-90.
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  14. Rodriguez-Palenzuela, Diego & Camba-Méndez, Gonzalo & García, Juan Angel, 2003. "Relevant economic issues concerning the optimal rate of inflation," Working Paper Series 0278, European Central Bank.
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  17. Thomas Beissinger & Christoph Knoppik, 2001. "Downward Nominal Rigidity in West German Earnings, 1975-95," German Economic Review, Verein für Socialpolitik, vol. 2(4), pages 385-417, November.
  18. Lebow David E & Saks Raven E & Wilson Beth Anne, 2003. "Downward Nominal Wage Rigidity: Evidence from the Employment Cost Index," The B.E. Journal of Macroeconomics, De Gruyter, vol. 3(1), pages 1-30, October.
  19. Knoppik, Christoph & Beissinger, Thomas, 2001. "How Rigid are Nominal Wages? Evidence and Implications for Germany," IZA Discussion Papers 357, Institute for the Study of Labor (IZA).
  20. Smith, Jennifer C, 2000. "Nominal Wage Rigidity in the United Kingdom," Economic Journal, Royal Economic Society, vol. 110(462), pages C176-95, March.
  21. Holden, Steinar & Wulfsberg, Fredrik, 2005. "Downward Nominal Wage Rigidity in the OECD," Memorandum 10/2005, Oslo University, Department of Economics.
  22. Christofides, Louis N. & Nearchou, Paris, 2007. "Real and nominal wage rigidities in collective bargaining agreements," Labour Economics, Elsevier, vol. 14(4), pages 695-715, August.
  23. Christofides, Louis N. & Stengos, Thanasis, 2001. "A non-parametric test of the symmetry of PSID wage-change distributions," Economics Letters, Elsevier, vol. 71(3), pages 363-368, June.
  24. Knoppik, Christoph, 2004. "Downward Nominal Rigidity in US Wage Data from the PSID - An Application of the Kernel-Location Approach," University of Regensburg Working Papers in Business, Economics and Management Information Systems 393, University of Regensburg, Department of Economics.
  25. Francesco Devicienti, 2002. "Downward Nominal Wage Rigidity in Italy: Evidence and Consequences," LABORatorio R. Revelli Working Papers Series 20, LABORatorio R. Revelli, Centre for Employment Studies.
  26. Orietta DESSY, 2004. "Wage rigidity in Italy," Departmental Working Papers 2004-18, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
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