Nominal wage rigidity in the European Countries: evidence from the Europanel
This paper analyses wage dynamics at individual level using the ECHP data. We compare yearly wage changes of employees in twelve European countries during the 1994-96 time-period. In all the European countries we find evidence of nominal and not real wage rigidity. At the same time, in none of the countries considered wages are completely downwardly rigid. We also compare nominal wage changes of employees staying with the same employer to movers and find that, despite movers distributions are generally more flexible than stayers, surprisingly enough they also have a spike at zero. Explanations of the above results with institutional features of the countries considered are given.
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