Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/264758 
Authors: 
Year of Publication: 
2010
Series/Report no.: 
Working Paper No. 166
Publisher: 
Oesterreichische Nationalbank (OeNB), Vienna
Abstract: 
This article is based on the results of two company surveys - the first was conducted in 2007, before the recession 2008/2009 hit Austria, and the second was conducted in 2009 shortly after the trough of it. We analyse firms' reactions to the crisis and focus on their labour market relevant decisions. Although base wages were cut more frequently than in economically calm times, wage reductions continued to be the exception rather than the rule. This indicates the existence of nominal wage rigidities in Austria. Instead of wage cuts, firms preferred to reduce working hours and to dismiss employees. We find that firm specific characteristics as well as characteristics of the workforce help explaining a firm's probability of dismissing employees. However, the force of the shock by which an individual firm is hit (during the 2008/2009 recession) does not in fluence the likelihood of dismissals.
Subjects: 
Wage Rigidity
Demand Shock
Micro Survey Data
JEL: 
C25
E24
J30
Document Type: 
Working Paper

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