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Downward Nominal Wage Rigidity in Services: Direct Evidence from a Firm Survey

Listed author(s):
  • Radowski, Daniel

    ()

    (Deutsche Bundesbank)

  • Bonin, Holger

    ()

    (IZA)

Registered author(s):

    The paper uses a new German employer survey on wage setting practices to analyze incidence and sources of nominal wage rigidity in services vs. manufacturing. We observe that wage freezes are significantly more frequent and wage cuts less frequent in services. Reasons preventing wage cuts reported by employers suggest that fear of excess worker turnover could explain this distinct behavior.

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    File URL: http://ftp.iza.org/dp3923.pdf
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    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3923.

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    Length: 10 pages
    Date of creation: Jan 2009
    Publication status: published in: Economics Letters, 2010, 106 (3), 227-229
    Handle: RePEc:iza:izadps:dp3923
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    1. Carl M. Campbell III & Kunal S. Kamlani, 1997. "The Reasons for Wage Rigidity: Evidence from a Survey of Firms," The Quarterly Journal of Economics, Oxford University Press, vol. 112(3), pages 759-789.
    2. Wolfgang Franz & Friedhelm Pfeiffer, 2006. "Reasons for Wage Rigidity in Germany," LABOUR, CEIS, vol. 20(2), pages 255-284, June.
    3. Agell, Jonas & Bennmarker, Helge, 2007. "Wage incentives and wage rigidity: A representative view from within," Labour Economics, Elsevier, vol. 14(3), pages 347-369, June.
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