Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/63227
Authors: 
Holden, Steinar
Wulfsberg, Fredrik
Year of Publication: 
2005
Series/Report no.: 
Memorandum, Department of Economics, University of Oslo 2005,10
Abstract: 
This paper explores the existence of downward nominal wage rigidity (DNWR) in 19 OECD countries, over the period 1973–1999, using data for hourly nominal wages at industry level. Based on a novel nonparametric statistical method, which allows for country and year specific variation in both the median and the dispersion of industry wage changes, we reject the hypothesis of no DNWR. The fraction of wage cuts prevented due to DNWR has fallen over time, from 70 percent in the 1970s to 11 percent in the late 1990s, but the number of industries affected by DNWR has increased. DNWR is more prevalent when inflation is high,unemployment is low, union density is high and employment protection legislation is strict.
Subjects: 
Downward nominal wage rigidity
OECD
employment protection legislation
wage setting
JEL: 
C14
C15
E31
Document Type: 
Working Paper

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