Economics, Econometrics and Finance
8 years ago

Firm-level agreements in wage formation reduce real wage rigidity.

The incidence of nominal and real wage rigidity: An individual-based sectoral approach. National Bank of Belgium Working Paper, No. 191, June 2010
Julián Messina, Philip Du Caju, Cláudia Duarte, Niels Lynggård Hansen, Mario Izquierdo

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The article looks at how hard it is for wages to go down in different sectors in Belgium, Denmark, Spain, and Portugal. They used data on individual wages to see how resistant they are to going down. They found that in countries where wages are set by agreements between companies and workers, it's easier for wages to go down when things are tough.