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Wage incentives and wage rigidity: A representative view from within
Uppsala University, Units outside the University, Office of Labour Market Policy Evaluation.
2007 (English)In: Labour Economics, ISSN 0927-5371, Vol. 14, no 3, 347-369 p.Article in journal (Refereed) Published
Abstract [en]

A recent literature has used surveys of those who set wages to learn about the nature of wage incentives and the sources of wage rigidity. Methodologically, we overcome many of the objections that have been raised against this work. Substantively, we find that: (i) the reasons for real wage rigidity differ significantly between large and small firms, and between the high- and low-end of the labor market; (ii) efficiency wage mechanisms reinforce rigidities due to worker bargaining power; (iii) money illusion is a widespread phenomenon across all segments of the labor market; (iv) unions reinforce nominal wage rigidities due to external pay comparisons; (v) there appears to be gender differences in pay bargaining and work morale.

Place, publisher, year, edition, pages
2007. Vol. 14, no 3, 347-369 p.
Keyword [en]
wage rigidity, wage incentives, survey evidence, matched data, behavioral macroeconomics
National Category
Economics and Business
URN: urn:nbn:se:uu:diva-150844DOI: 10.1016/j.labeco.2006.04.002ISI: 000246651900004OAI: oai:DiVA.org:uu-150844DiVA: diva2:409081
Available from: 2011-04-07 Created: 2011-04-06 Last updated: 2011-04-07Bibliographically approved

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