The extent and consequences of downward nominal wage rigidity

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dc.contributor.author Devereux, Paul J.
dc.contributor.author Altonji, Joseph G. en
dc.date.accessioned 2008-07-09T13:45:54Z
dc.date.available 2008-07-09T13:45:54Z
dc.date.copyright Elsevier 2000 en
dc.date.issued 2000
dc.identifier.citation Research in Labor Economics en
dc.identifier.isbn 0762313471
dc.identifier.uri http://hdl.handle.net/10197/311
dc.description.abstract Using the Panel Study of Income Dynamics, we find that true wage changes have many fewer nominal cuts and more nominal freezes than reported nominal wage changes. The data overwhelmingly rejects a model of flexible wage changes and provides some evidence against a model of perfect downward rigidity in favor of a more general model. The more general model incorporates downward rigidity but specifies that nominal wage cuts may occur when large cuts would occur in the absence of wage rigidity. However, the results of the general model imply that nominal wage cuts are rare. We also analyze the personnel files of a large corporation and find cuts in base pay are rare and almost always associated with changes in full time status or a switch between compensation schemes involving incentives. Our evidence on the consequences of nominal wage rigidity is mixed. We find modest support for the hypothesis that workers who are overpaid because of nominal wage rigidity are less likely to quit. en
dc.format.extent 4640 bytes
dc.format.mimetype application/pdf
dc.language.iso en en
dc.publisher Emerald Insight en
dc.relation.isversionof Altonji, Joseph G. and Devereux, Paul J. (July 1999) 'The Extent and Consequences of Downward Nominal Wage Rigidity'. NBER Working Paper No. 7236, National Bureau of Economic Research en
dc.subject.classification E24 en
dc.subject.classification E31 en
dc.subject.classification J3 en
dc.subject.lcsh Wages en
dc.subject.lcsh Employee retention en
dc.title The extent and consequences of downward nominal wage rigidity en
dc.type Journal Article en
dc.internal.authorurl Paul J. Devereux (web page) en
dc.internal.authorurl http://www.ucd.ie/economics/staff/devereux/paul.devereux.htm en
dc.internal.authorcontactother Email: devereux@ucd.ie; Tel: 353 1 716 8279 en
dc.internal.authorid UCD0006 en
dc.internal.availability Full text available en
dc.internal.webversions Publisher's version en
dc.internal.webversions http://dx.doi.org/10.1016/S0147-9121(00)19015-6 en
dc.status Peer reviewed en
dc.identifier.volume 19 en
dc.identifier.startpage 383 en
dc.identifier.endpage 431 en
dc.identifier.doi 10.1016/S0147-9121(00)19015-6
dc.neeo.contributor Devereux|Paul J.|aut|UCD0006
dc.neeo.contributor Altonji|Joseph G.|aut|


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