European firms face wage rigidity, impacting workforce composition and labor market
The study looked at how wages in European firms are resistant to going down, even when the company faces challenges. They found that the type of workers at a company and the rules of the labor market affect how flexible wages are. Companies with more permanent workers and stricter job security laws tend to have wages that don't decrease easily. Also, when more workers are covered by collective bargaining agreements, wages are less likely to go down in response to economic changes.