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Downward Nominal Wage Rigidity in Services: Direct Evidence from a Firm Survey

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Author Info
Radowski, Daniel () (Deutsche Bundesbank)
Bonin, Holger () (ZEW Mannheim)
Abstract

The paper uses a new German employer survey on wage setting practices to analyze incidence and sources of nominal wage rigidity in services vs. manufacturing. We observe that wage freezes are significantly more frequent and wage cuts less frequent in services. Reasons preventing wage cuts reported by employers suggest that fear of excess worker turnover could explain this distinct behavior.

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File URL: http://ftp.iza.org/dp3923.pdf
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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3923.

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Length: 10 pages
Date of creation: Jan 2009
Date of revision:
Publication status: forthcoming in: Economics Letters
Handle: RePEc:iza:izadps:dp3923

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Related research
Keywords: nominal wage rigidity; efficiency wages; manufacturing and services; Germany;

Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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This page was last updated on 2009-11-30.

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