Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76459
Authors: 
Agell, Jonas
Bennmarker, Helge
Year of Publication: 
2003
Series/Report no.: 
CESifo Working Paper 1081
Abstract: 
We use a random survey of Swedish human resource managers to study the reasons for wage rigidity. Our findings are as follows. First, during the exceptional recession of the 1990s only 1.1 percent of workers received a wage cut. Second, much wage rigidity can be traced to behavioral mechanisms involving negative reciprocity, relative wage comparisons and money illusion. Third, the reasons for wage rigidity differ significantly between large and small establishments, and between the high- and low-end of the labor market. Fourth, there are significant empirical complementarities between efficiency wage mechanisms and worker bargaining strength, and between “exogenous” institutions and endogenous sources of wage rigidity. Fifth, external pay comparisons are a more important source of rigidity in highly unionized establishments. Sixth, there are significant gender differences in pay bargaining and work moral.
Subjects: 
wage rigidity
survey evidence
matched data
reciprocity
behavioral macroeconomis
labor law
Document Type: 
Working Paper

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