Wage Rigidity in Italy
UNIMI Economics Working Paper No. 18.2004
Posted: 29 Dec 2004
Date Written: May 2004
In this study we analyse wage rigidity at the individual level in Italy, presenting evidence from the 1989-1995 Survey of the Bank of Italy. A deep statistical analysis is carried out, replicating previous approaches by McLaughlin, Card and Hyslop and Kahn over similar US data. We also propose new, simple tests for wage rigidity. The different approaches adopted seem to go in the same the direction of showing a relevant, persistent degree of nominal wage rigidity in Italy. The extent of wage rigidity is significant not only for employees staying in the same firm, but also for movers. At the same time, wages are not completely downwardly rigid: a certain percentage of wage cuts is reported by individuals.
Keywords: Wage rigidity, movers, stayers
JEL Classification: J30, J38
Suggested Citation: Suggested Citation