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Wage setting in Hungary: evidence from a firm survey

Author Info

Listed author(s):
  • Gábor Kézdi

    (Central European University)

  • István Kónya

    ()

    (Magyar Nemzeti Bank (central bank of Hungary))

Abstract

We document results from a survey of wage setting in Hungarian enterprises. The survey was developed and coordinated by the Eurosystem Wage Dynamics Network, and it was administered in 17 European countries; this allows us to put the Hungarian findings in context. The main conclusion from the survey is that while Hungarian firms operate in a quite flexible institutional environment, their wage setting practices are relatively rigid. In its wage setting outcomes, Hungary shares more similarities with Western European countries than with countries in the Central and Eastern European region. The survey provides strong evidence that the observed wage setting behaviour can be explained by internal factors related to employee motivation, perceived fairness, and firms’ desire to maintain a desired wage distribution.

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File URL: http://www.mnb.hu/letoltes/kezdi-konya-2009-okt-en.pdf
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Article provided by Magyar Nemzeti Bank (Central Bank of Hungary) in its journal MNB Bulletin.

Volume (Year): 4 (2009)
Issue (Month): 3 (October)
Pages: 20-26

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Handle: RePEc:mnb:bullet:v:4:y:2009:i:3:p:20-26
Contact details of provider: Web page: http://www.mnb.hu/

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Keywords: wage setting; survey; Hungary; Wage Dynamics Network.;

Other versions of this item:

Find related papers by JEL classification:
  • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
  • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
  • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
  • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods

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  1. Haefke, Christian & Sonntag, Marcus & van Rens, Thijs, 2013. "Wage rigidity and job creation," Journal of Monetary Economics, Elsevier, vol. 60(8), pages 887-899.
  2. George A. Akerlof & Janet L. Yellen, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 255-283.
  3. Mortensen, Dale & Pissarides, Christopher, 2011. "Job Creation and Job Destruction in the Theory of Unemployment," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 1-19.
  4. Giulia Faggio, 2007. "Job destruction, job creation and unemployment in transition countries: what can we learn?," LSE Research Online Documents on Economics 19716, London School of Economics and Political Science, LSE Library.
  5. 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.
  6. Salop, Steven C, 1979. "A Model of the Natural Rate of Unemployment," American Economic Review, American Economic Association, vol. 69(1), pages 117-125, March.
  7. Ch. Pissarides., 2011. "The Unemployment Volatility Puzzle: Is Wage Stickiness the Answer?," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 1.
  8. M. Druant & S. Fabiani & Gabor Kezdi & Ana Lamo & Fernando Martins & R. Sabbatini, 2009. "How are Firms’ Wages and Prices Linked: Survey Evidence in Europe," Working Papers w200918, Banco de Portugal, Economics and Research Department.
  9. Tonin, Mirco, 2011. "Minimum wage and tax evasion: Theory and evidence," Journal of Public Economics, Elsevier, vol. 95(11), pages 1635-1651.
  10. Kertesi, Gabor & Köllő, János, 2003. "Fighting “Low Equilibria” by Doubling the Minimum Wage? Hungary’s Experiment," IZA Discussion Papers 970, Institute for the Study of Labor (IZA).
  11. Beaudry, Paul & DiNardo, John, 1991. "The Effect of Implicit Contracts on the Movement of Wages over the Business Cycle: Evidence from Micro Data," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 665-688, August.
  12. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
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Cited by:

  1. Kónya, István & Jakab M., Zoltán, 2012. "Munkapiaci súrlódások DSGE modellekben
    [Labour market frictions in DSGE models]    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 933-962.

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