A Shred of Evidence on Theories of Wage Stickiness

19 Pages Posted: 28 Dec 2006 Last revised: 28 Jun 2010

See all articles by Alan S. Blinder

Alan S. Blinder

Princeton University - Department of Economics; National Bureau of Economic Research (NBER)

Don CHOI

affiliation not provided to SSRN

Date Written: September 1989

Abstract

A small interview survey was undertaken to see how actual wage-setters would react to the central. ideas of several economic theories of wage stickiness. Wage cuts were surprisingly prevalent in recent years, despite the booming economy. The strongest finding was that managers believe that perceptions of fairness play a major motivational role in labor markets; and that a "fair" wage policy is a good deal more complicated than simply not cutting wages. We also found substantial evidence for money illusion and against the adverse-selection version of the efficiency wage model.

Suggested Citation

Blinder, Alan S. and CHOI, Don, A Shred of Evidence on Theories of Wage Stickiness (September 1989). NBER Working Paper No. w3105. Available at SSRN: https://ssrn.com/abstract=463514

Alan S. Blinder (Contact Author)

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Don CHOI

affiliation not provided to SSRN

No Address Available

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