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Wage Rigidity in Canadian Collective Bargaining Agreements

  • Louis N. Christofides
  • Thanasis Stengos

We examine wage-change distributions in Canadian union contracts for evidence of downward nominal wage rigidity. Its probability increases substantially during low-inflation periods. During such periods, we discern no reduction in the incidence of real wage cuts. However, their magnitude is modest, suggesting that the labour market may not function as smoothly.

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File URL: http://papers.econ.ucy.ac.cy/RePEc/papers/1-2003.pdf
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Paper provided by University of Cyprus Department of Economics in its series University of Cyprus Working Papers in Economics with number 1-2003.

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Length: 38 pages
Date of creation: Mar 2003
Date of revision:
Handle: RePEc:ucy:cypeua:1-2003
Contact details of provider: Web page: http://www.econ.ucy.ac.cy

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  6. Christofides, Louis N. & Stengos, Thanasis, 2001. "A non-parametric test of the symmetry of PSID wage-change distributions," Economics Letters, Elsevier, vol. 71(3), pages 363-368, June.
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  10. Kaufman, Roger T & Woglom, Geoffrey, 1984. "The Effects of Expectations on Union Wages," American Economic Review, American Economic Association, vol. 74(3), pages 418-32, June.
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  12. Charles Freedman & Tiff Macklem, 1998. "A Comment on "The Great Canadian Slump"," Canadian Journal of Economics, Canadian Economics Association, vol. 31(3), pages 646-665, August.
  13. Katharine G. Abraham & John C. Haltiwanger, 1995. "Real Wages and the Business Cycle," Journal of Economic Literature, American Economic Association, vol. 33(3), pages 1215-1264, September.
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  17. Campbell, Carl M, III & Kamlani, Kunal S, 1997. "The Reasons for Wage Rigidity: Evidence from a Survey of Firms," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 759-89, August.
  18. Vroman, Wayne, 1984. "Wage Contract Settlements in U.S. Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 66(4), pages 661-65, November.
  19. Wayne Simpson & Norman E. Cameron & Derek Hum, 1998. "Is Hypoinflation Good Policy?," Canadian Public Policy, University of Toronto Press, vol. 24(3), pages 291-308, September.
  20. Smith, Jennifer C, 2000. "Nominal Wage Rigidity in the United Kingdom," Economic Journal, Royal Economic Society, vol. 110(462), pages C176-95, March.
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  22. Fehr, Ernst, 2000. "The Robustness and Real Consequences of Nominal Wage Rigidity," CEPR Discussion Papers 2516, C.E.P.R. Discussion Papers.
  23. Ronald G. Ehrenberg & Leif Danziger & Gee San, 1982. "Cost-of-Living Adjustment Clauses in Union Contracts," NBER Working Papers 0998, National Bureau of Economic Research, Inc.
  24. David Card, 1984. "An Empirical Model of Wage Indexation Provisions in Union Contracts," NBER Working Papers 1388, National Bureau of Economic Research, Inc.
  25. Farès, J. & Hogan, S., 2000. "The Employment Costs of Downward Nominal-Wage Rigidity," Working Papers 00-1, Bank of Canada.
  26. David E. Lebow & David J. Stockton & William L. Wascher, 1995. "Inflation, nominal wage rigidity, and the efficiency of labor markets," Finance and Economics Discussion Series 95-45, Board of Governors of the Federal Reserve System (U.S.).
  27. David Card, 1983. "Cost-of-living escalators in major union contracts," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 37(1), pages 34-48, October.
  28. Tobin, James, 1972. "Inflation and Unemployment," American Economic Review, American Economic Association, vol. 62(1), pages 1-18, March.
  29. Kahn, Shulamit, 1997. "Evidence of Nominal Wage Stickiness from Microdata," American Economic Review, American Economic Association, vol. 87(5), pages 993-1008, December.
  30. Kenneth J. McLaughlin, 1999. "Are nominal wage changes skewed away from wage cuts?," Review, Federal Reserve Bank of St. Louis, issue May, pages 117-132.
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