Documents Anderton, Robert 18 results

"We explore the impact of wage adjustment on employment with a focus on the role of downward nominal wage rigidities. We use a harmonised survey dataset, which covers 25 European countries in the period 2010-2013. The main advantages of the data are firm-level information on the change in economic conditions and collective pay agreements. Our findings confirm the presence of wage rigidities in Europe: first, collective pay agreements reduce the probability of downward wage adjustment; second, the rise in the probability of downward base wage responses to a decrease in demand is significantly smaller than the rise in the probability of an upward wage response to an increase in demand. Estimation results point to a negative effect of downward wage rigidities on employment at the firm level."

"This paper estimates wage equations to test for changes in the responsiveness of wages to unemployment using panel estimates which pool the data across the euro area countries. More specifically, we investigate whether the sensitivity of euro area wages to movements in unemployment is different during downturns (i.e., downward wage rigidity), whether it has changed during the crisis and which institutional features might be driving the results. We find evidence of a lower responsiveness of wages to unemployment during downturns, consistent with the stylised facts that euro area wages are rigid downwards. We also find that the degree of downward wage rigidity has declined as the crisis became more prolonged. Overall, it seems that much of the downward wage rigidity reflects institutional factors, such as a high degree of union coverage and employment protection. Additionally, a rising share of the long-term unemployed lowers the responsiveness of wages to unemployment while a rising share of temporary labour seems to dampen wage growth."