Home About Latest Browse RSS Advanced Search

Federal Reserve Bank of Boston
Working Papers
How strong is the case for downward real wage rigidity?
Steinar Holden
Fredrik Wulfsberg
Abstract

This paper explores the existence of downward real wage rigidity (DRWR) in 19 OECD countries, over the period 1973-1999, using data for hourly nominal earnings at the industry level. Based on a nonparametric statistical method, which allows for country- and year-specific variation in both the median and the dispersion of industry wage changes, we find evidence of some DRWR in OECD countries overall, as well as for specific geographical regions and time periods. There is some evidence that real wage cuts are less prevalent in countries with strict employment protection legislation and high union density. Generally, we find stronger evidence for downward nominal wage rigidity than for downward real wage rigidity.


Download Full text
Download Full text
Cite this item
Steinar Holden & Fredrik Wulfsberg, How strong is the case for downward real wage rigidity?, Federal Reserve Bank of Boston, Working Papers 07-6, 2007.
More from this series
JEL Classification:
Subject headings:
Keywords: Wages
For corrections, contact Catherine Spozio ()
Fed-in-Print is the central catalog of publications within the Federal Reserve System. It is managed and hosted by the Economic Research Division, Federal Reserve Bank of St. Louis.

Privacy Legal