Nominal Wage Flexibility and Institutions: Preliminary Micro-Evidence from the Europanel

UNIMI Economics Working Paper No. 17.2004

34 Pages Posted: 29 Dec 2004

See all articles by Orietta Dessy

Orietta Dessy

University of Milan - Department of Business Policy and Economics

Date Written: May 2004

Abstract

This paper analyses wage dynamics at individual level using the European Community Household Panel data. We compare yearly wage changes of full-time employees staying in the same firm for twelve European countries during the 1994-96 time-period. For all the European countries we find evidence of nominal wage rigidity. The percentage of employees receiving no wage changes is different across countries, with Germany and Ireland ranking at the top and the bottom respectively. At the same time, nominal wage cuts are not rare. We therefore consider the impact of the bargaining structure and institutions in the European labor markets on the extent of nominal wage flexibility observed.

Keywords: Nominal wage rigidity, centralisation, coverage, employment, protection legislation

JEL Classification: J3, J51

Suggested Citation

Dessy, Orietta, Nominal Wage Flexibility and Institutions: Preliminary Micro-Evidence from the Europanel (May 2004). UNIMI Economics Working Paper No. 17.2004, Available at SSRN: https://ssrn.com/abstract=634102 or http://dx.doi.org/10.2139/ssrn.634102

Orietta Dessy (Contact Author)

University of Milan - Department of Business Policy and Economics ( email )

Milano, I-20122
Italy

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