Wage Rigidity: Measurement, Causes and Consequences

9 Pages Posted: 27 Nov 2007

See all articles by Lorenz Goette

Lorenz Goette

University of Lausanne; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Uwe Sunde

Ludwig Maximilian University of Munich (LMU)

Thomas K. Bauer

Rhine-Westphalia Institute for Economic Research (RWI-Essen); University of Bochum - Faculty of Economics; IZA Institute of Labor Economics

Abstract

Wage rigidity the observation that wages cannot be adjusted downwards has important implications for labor markets and macroeconomic performance. Empirical evidence on the extent, causes and consequences of wage rigidity on the individual level is relatively scant, however. This Feature presents articles that apply a new methodology to estimate the incidence and extent of nominal and real wage rigidity among the employed in three major European countries (Germany, Italy and Great Britain). The results document the pervasiveness of nominal and, particularly, real wage rigidity in different institutional and economic environments, and a recent decline in real wage rigidity.

Suggested Citation

Goette, Lorenz F. and Sunde, Uwe and Bauer, Thomas K., Wage Rigidity: Measurement, Causes and Consequences. Economic Journal, Vol. 117, Issue 524, pp. F499-F507, November 2007. Available at SSRN: https://ssrn.com/abstract=1032364 or http://dx.doi.org/10.1111/j.1468-0297.2007.02093.x

Lorenz F. Goette (Contact Author)

University of Lausanne ( email )

Department of Economics
Batiment Internef
Lausanne, 1015
Switzerland
(021) 692'3496 (Phone)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org

Uwe Sunde

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

Thomas K. Bauer

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany
+49 201 8149 264 (Phone)
+49 201 8149 284 (Fax)

HOME PAGE: http://www.rwi-essen.de

University of Bochum - Faculty of Economics ( email )

Universitätsstraße 150
Gebäude GC, Ebene 3, Raum 58
D-44780 Bochum
Germany
+02 34 32 28341 (Phone)
+02 34 32 14273 (Fax)

HOME PAGE: http://www.ruhr-uni-bochum.de/empwifo/

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany
+49 228 38 94 529 (Phone)
+49 228 38 94 510 (Fax)

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