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Title:Real and nominal wage rigidity in a model of equal-treatment contracting PDF Logo
Authors:Martins, Pedro Silva
Snell, Andy
Thomas, Jonathan P.
Issue Date:2009
Series/Report no.:IZA Discussion Papers 4346
Abstract:Following insights by Bewley (1999a), this paper analyses a model with downward rigidities in which firms cannot pay discriminate based on a year of entry to a firm, and develops an equilibrium model of wages and unemployment. We solve for the dynamics of wages and unemployment under conditions of downward wage rigidity, where forward looking firms take into account these constraints. Using simulated productivity data based on the post-war US economy, we analyse the ability of the model to match certain stylised labour market facts.
Subjects:Labour contracts
business cycle
unemployment
equal treatment
downward rigidity
cross-contract restrictions
JEL:E32
J41
Persistent Identifier of the first edition:urn:nbn:de:101:1-20090909669
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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