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Wage rigidity in Canadian collective bargaining agreements

  • Louis N. Christofides
  • Thanasis Stengos

The authors search information on the provisions of 10,947 wage contracts signed in the Canadian unionized sector between 1976 and 1999 for evidence of downward nominal wage rigidity (the disinclination of wages to fall, in nominal dollars, below their established level). Over the sample period, real wage reductions were common, but nominal wage reductions were rare. The probability of downward nominal wage rigidity increased substantially during low-inflation periods. During such periods, apparently there was no reduction in the incidence of real wage cuts, but the magnitude of those cuts was modest, suggesting a lesser ability of wages to adjust to labor market conditions than at other times. (Author's abstract.) (Free full-text download available at http://digitalcommons.ilr.cornell.edu/ilrreview/.)

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Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

Volume (Year): 56 (2003)
Issue (Month): 3 (April)
Pages: 429-448

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Handle: RePEc:ilr:articl:v:56:y:2003:i:3:p:429-448
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