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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.

Suggested Citation

  • Peter Howitt, 2002. "Looking Inside the Labor Market: A Review Article," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 125-138, March.
    • Handle: RePEc:aea:jeclit:v:40:y:2002:i:1:p:125-138
    Note: DOI: 10.1257/0022051026994
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    References listed on IDEAS

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