The Margins of Labor Cost Adjustment : Survey Evidence from European Firms

• Tác giả: Jan Babecky
• Ngôn ngữ: eng
• Ký hiệu phân loại: 331.1 Labor force and market
• Thông tin xuất bản: World Bank, Washington, DC, 2014
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 306510
• Chủ đề: 1. AFFECTED WORKERS; 2. BRANCHES; 3. CENTRAL BANK; 4. CENTRAL BANKS; 5. COLLECTIVE AGREEMENTS

Tóm tắt

Firms have multiple options at the time of adjusting their wage bills. However, previous literature has mainly focused on base wages. This paper broadens the analysis beyond downward rigidity in base wages by investigating the use of other margins of labor cost adjustment at the firm level. Using data from a unique survey, the authors find that firms make frequent use of other, more flexible, components of compensation to adjust the cost of labor. Changes in bonuses and non-pay benefits are some of the potential margins firms use to reduce costs. The paper also shows how the margins of adjustment chosen are affected by firm and worker characteristics.