How Wages Change: Micro Evidence from the International Wage Flexibility Project

Journal of Economic Perspectives, Vol 21, No. 2., 2007

29 Pages Posted: 30 Nov 2020

See all articles by Melanie E. Ward-Warmedinger

Melanie E. Ward-Warmedinger

European Commission; IZA Institute of Labor Economics; European Central Bank (ECB); Centre for Economic Policy Research (CEPR)

Julián Messina

University of Girona; Foundation for Applied Economic Research (FEDEA); IZA Institute of Labor Economics

William T. Dickens

Northeastern University - Department of Economics; Federal Reserve Banks - Federal Reserve Bank of Boston; Brookings Institution

Jarkko Turunen

International Monetary Fund

Erica Groshen

Cornell University

Steinar Holden

University of Oslo - Department of Economics; Norges Bank; CESifo (Center for Economic Studies and Ifo Institute)

Mark Schweitzer

Federal Reserve Banks - Federal Reserve Bank of Cleveland

Lorenz Goette

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

Multiple version iconThere are 4 versions of this paper

Date Written: October 9, 2007

Abstract

Workers’ wages are not set in a spot market. Instead, the wages of most workers — at least those who do not switch jobs — typically change only annually and are mediated by a complex set of institutions and factors such as contracts, unions, standards of fairness, minimum wage policy, transfers of risk, and incomplete information. The goal of the International Wage Flexibility Project (IWFP) — a consortium of over 40 researchers with access to individual workers’ earnings data for 16 countries — is to provide new microeconomic evidence on how wages change for continuing workers. Wage changes due to worker mobility are governed by different processes and are beyond the scope of this study.

Keywords: Real and nominal wage flexibility, wages

Suggested Citation

Ward-Warmedinger, Melanie E. and Messina, Julián and Dickens, William T. and Turunen, Jarkko and Groshen, Erica and Holden, Steinar and Schweitzer, Mark and Goette, Lorenz F., How Wages Change: Micro Evidence from the International Wage Flexibility Project (October 9, 2007). Journal of Economic Perspectives, Vol 21, No. 2., 2007, Available at SSRN: https://ssrn.com/abstract=3708277

Melanie E. Ward-Warmedinger

European Commission ( email )

BU-1 05/190
Brussels, Bruxelles B-1049
Belgium

IZA Institute of Labor Economics

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

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Julián Messina

University of Girona ( email )

Girona, 17071
Spain

Foundation for Applied Economic Research (FEDEA)

Jorge Juan 46
Madrid, 28001
Spain

IZA Institute of Labor Economics

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

William T. Dickens (Contact Author)

Northeastern University - Department of Economics ( email )

301 Lake Hall
Boston, MA 02115
United States

Federal Reserve Banks - Federal Reserve Bank of Boston ( email )

600 Atlantic Avenue
Boston, MA 02210
United States

Brookings Institution ( email )

1775 Massachusetts Ave. NW
Economic Studies
Washington, DC 20036-2188
United States

Jarkko Turunen

International Monetary Fund ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Erica Groshen

Cornell University

Ithaca, NY 14853
United States

Steinar Holden

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway
+47 22 85 51 56 (Phone)
+47 22 85 50 35 (Fax)

HOME PAGE: http://folk.uio.no/~sholden/

Norges Bank ( email )

P.O. Box 1179
Oslo, N-0107
Norway

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Mark Schweitzer

Federal Reserve Banks - Federal Reserve Bank of Cleveland ( email )

East 6th & Superior
Cleveland, OH 44101-1387
United States

Lorenz F. Goette

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

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