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Title:Are real wages rigid downwards? PDF Logo
Authors:Holden, Steinar
Wulfsberg, Fredrik
Issue Date:2007
Series/Report no.:Memorandum, Department of Economics, University of Oslo 2007,07
Abstract:This paper explores the existence of downward real wage rigidity (drwr) in 19 oecd countries, over the period 1973–1999, using data for hourly nominal earnings at industry level. Based on a nonparametric statistical method, which allows for country and year specific variation in both the median and the dispersion of industry wage changes, we find evidence of some downward rigidity of real wages in OECD countries overall, as well as for regions and time periods. There is some evidence that real wage cuts are less prevalent under strict employment protection legislation and high union density. Generally, we find stronger evidence for downward nominal than for downward real wage rigidity.
Subjects:Downward real wage rigidity
OECD
employment protection legislation
wage setting
JEL:C14
C15
E31
J30
J50
Document Type:Working Paper
Appears in Collections:Memorandum, Department of Economics, University of Oslo

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