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Downward Nominal and Real Wage Rigidity: Survey Evidence from European Firms*

* This paper has been replicated

Author

Listed:
  • Jan Babecký
  • Philip Du Caju
  • Theodora Kosma
  • Martina Lawless
  • Julián Messina
  • Tairi Rõõm

Abstract

We present new evidence from a unique survey of firms across Europe on downward wage rigidity in both real and nominal terms. Our results indicate that wage rigidities are related to workforce composition in a manner that is consistent with related theoretical models. We also find that wage rigidity depends on the labour market institutional environment. Collective bargaining coverage is positively related with downward real wage rigidity, measured on the basis of wage indexation. Downward nominal wage rigidity is positively associated with the extent of permanent contracts and this effect is stronger in countries with stricter employment protection regulations.

Suggested Citation

  • Jan Babecký & Philip Du Caju & Theodora Kosma & Martina Lawless & Julián Messina & Tairi Rõõm, 2010. "Downward Nominal and Real Wage Rigidity: Survey Evidence from European Firms," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(4), pages 884-910, December.
    • Handle: RePEc:bla:scandj:v:112:y:2010:i:4:p:884-910
    DOI: 10.1111/j.1467-9442.2010.01624.x
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    Replication

    This item has been replicated by:
  • Daniel Dias & Carlos Marques & Fernando Martins, 2015. "A replication note on downward nominal and real wage rigidity: survey evidence from European firms," Empirical Economics, Springer, vol. 49(3), pages 1143-1152, November.

    • More about this item

    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
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • P5 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems

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    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. Downward Nominal and Real Wage Rigidity: Survey Evidence from European Firms (Scand J Econ 2010) in ReplicationWiki

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