Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/203113 
Year of Publication: 
2019
Series/Report no.: 
SAFE Working Paper No. 258
Publisher: 
Goethe University Frankfurt, SAFE - Sustainable Architecture for Finance in Europe, Frankfurt a. M.
Abstract: 
We study nominal wage rigidity in the Netherlands using administrative data, which has three key features: (1) high-frequency (monthly), (2) high-quality (administrative records), and (3) high coverage (the universe of workers and the universe of firms). We find wage rigidity patterns in the data that are similar to wage behavior documented for other European countries. In particular we find that the hazard function has two spikes, one at 12 months and another one at 24 months and wage changes have time and state dependency components. As a novel and important piece of evidence we also uncover substantial heterogeneity in the frequency of wage changes due to explicit terms of the labor contract. In particular, contracts featuring flexible hours, such as on-call contracts, exhibit a higher probability of a change in the contract wage compared to fixed hour contracts. Once we split the sample based on contract characteristics, we also find that the response of wage changes to the time and state component is heterogeneous across different type of contracts - with relatively more downward adjustments in flexible-hour contract wages in response to aggregate unemployment.
Subjects: 
wage rigidity
flexible-hour contracts
microdata
state dependency
time dependency
JEL: 
E24
J31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
681.02 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.