Real wages in Finland remain rigid despite macroeconomic flexibility, impacting workers.
The article explores wage flexibility in Finland from 1985 to 2001. The researchers looked at data from employers' associations and found that while there was macroeconomic flexibility in the labor market, individual-level wage changes were actually quite rigid. Real wages declined during the early 1990s depression, with many workers experiencing wage cuts. However, despite high unemployment levels, individual-level wage changes remained rigid, similar to the levels seen in the 1980s.