Chilean wage rigidity leads to higher employment fluctuations, study finds.
The study looked at how wages in Chile don't change easily, affecting employment. They used data from 440 thousand wage records from 2001 to 2007. The results show that wages in Chile take about nine quarters to adjust. Wages are less flexible in bigger firms, with more female workers, older workers, and white-collar employees. When wages are rigid, employment levels change more during economic ups and downs.