Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154722
Authors: 
Fabiani, Silvia
Lamo, Ana
Messina, Julián
Rõõm, Tairi
Year of Publication: 
2015
Citation: 
[Journal:] IZA Journal of Labor Policy [ISSN:] 2193-9004 [Volume:] 4 [Year:] 2015 [Pages:] 1-28
Abstract: 
This paper exploits a unique cross-country, firm-level survey to study the responses of European firms to the sharp demand and credit contraction triggered by the global Great Recession of 2009. The analysis reveals that cost reduction-particularly labour cost reduction through the adjustment of quantities rather than prices-was the prevailing strategy that firms had adopted by summer 2009. Remarkably, not even during the worst postwar recession did employers cut base wages to reduce costs. Different combinations of adjustment strategies are apparent, and the particular choices of labour costs adjustments depend substantially on countries' institutional settings.
Subjects: 
Labour costs
Margins
Demand and credit shocks
Employment
Firm survey
Wage cuts
European Union
JEL: 
J30
J32
J33
J51
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/4.0/
Document Type: 
Article

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