Real and Nominal Wage Rigidities in Collective Bargaining Agreements

38 Pages Posted: 15 Jun 2007

See all articles by Louis N. Christofides

Louis N. Christofides

University of Cyprus - Department of Economics; University of Guelph; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics

Paris Nearchou

University of Cyprus - Department of Economics

Date Written: May 2007

Abstract

An earlier study of wage agreements, reached in the Canadian unionized sector between 1976-99, found that wage adjustment is characterized by downward nominal rigidity and significant spikes at zero. We extend this earlier approach to encompass the possibility of real as well as nominal wage rigidity. The addition of real wage rigidity variables enhances earlier results and suggests that real rigidity increases significantly the mass in the histogram bin containing the mean anticipated rate of inflation, as well as in adjacent bins. Downward nominal wage rigidities and spikes at zero remain important.

Keywords: real, nominal wage rigidities

JEL Classification: J52, J31

Suggested Citation

Christofides, Louis N. and Nearchou, Paris, Real and Nominal Wage Rigidities in Collective Bargaining Agreements (May 2007). IZA Discussion Paper No. 2799. Available at SSRN: https://ssrn.com/abstract=994256

Louis N. Christofides (Contact Author)

University of Cyprus - Department of Economics ( email )

75 Kallipoleos Street
P.O. Box 20537
1678 Nicosia
Cyprus
357 22 892448 (Phone)
357 22 892432 (Fax)

University of Guelph ( email )

Guelph, Ontario
Canada
001-519-763-8497 (Phone)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

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

IZA Institute of Labor Economics

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

Paris Nearchou

University of Cyprus - Department of Economics ( email )

75 Kallipoleos Street
P.O. Box 20537
1678 Nicosia
Cyprus

Register to save articles to
your library

Register

Paper statistics

Downloads
40
Abstract Views
589
PlumX Metrics