Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/33428
Authors: 
Franz, Wolfgang
Pfeiffer, Friedhelm
Year of Publication: 
2006
Series/Report no.: 
IZA Discussion Papers 2017
Abstract: 
This study investigates institutional and economic reasons for downward wage rigidity regarding three occupational skill groups. Based on a survey of 801 firms in Germany and an econometric analysis, we find strong support for explanations based on the effects of labour union contracts and efficiency wages that differ between skill groups. Survey respondents indicate that labour union contracts and implicit contracts are important reasons for wage rigidity for the (less) skilled. Specific human capital and negative signals for new hires are causes of the stickiness of wages for the highly skilled. Compared with US evidence, German firms seem to attach more importance to labour union contracts and specific human capital.
Subjects: 
wage rigidity
labour union contracts
efficiency wage theory
implicit contract theory
regulation of labour
JEL: 
J41
J51
K31
Document Type: 
Working Paper

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