IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2512.19622.html

Wage-Setting Constraints and Firm Responses to Demand Shocks

Author

Listed:
  • Manudeep Bhuller
  • Lukas Delgado-Prieto
  • Santiago Hermo
  • Linnea Lorentzen

Abstract

This paper investigates how institutional wage-setting constraints, such as a national minimum wage or collectively bargained wages, affect firm responses to demand shocks. We develop a framework to interpret heterogeneous shock responses that depend on the constraints firms face, and provide empirical evidence on the relevance of these constraints in shaping firm behavior across three countries with different institutional settings: Portugal, Norway, and Colombia. We discuss the implications of our findings for conventional estimates of rent-sharing and employer wage-setting power.

Suggested Citation

  • Manudeep Bhuller & Lukas Delgado-Prieto & Santiago Hermo & Linnea Lorentzen, 2025. "Wage-Setting Constraints and Firm Responses to Demand Shocks," Papers 2512.19622, arXiv.org.
    • Handle: RePEc:arx:papers:2512.19622
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2512.19622
    File Function: Latest version
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2512.19622. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.