Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/196623 
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers No. 12125
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
For more than 80 years, many macroeconomic analyses have been premised on the assumption that workers' nominal wage rates cannot be cut. Contrary evidence from household surveys reasonably has been discounted on the ground that the measurement of frequent wage cuts might be an artifact of reporting error. This article summarizes a more recent wave of studies based on more accurate wage data from payroll records and pay slips. By and large, these studies indicate that, except in extreme circumstances (when nominal wage cuts are either legally prohibited or rendered beside the point by very high inflation), nominal wage cuts from one year to the next appear quite common, typically affecting 15-25 percent of job stayers in periods of low inflation.
Subjects: 
nominal wage rigidity
payroll records
JEL: 
J3
E24
Document Type: 
Working Paper

Files in This Item:
File
Size
299.98 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.