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Real and Nominal Wage Rigidities in Collective Bargaining Agreements

Author

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  • Christofides, Louis N.

    (University of Cyprus)

  • Nearchou, Paris

    (University of Cyprus)

Abstract

An earlier study of wage agreements, reached in the Canadian unionized sector between 1976-99, found that wage adjustment is characterized by downward nominal rigidity and significant spikes at zero. We extend this earlier approach to encompass the possibility of real as well as nominal wage rigidity. The addition of real wage rigidity variables enhances earlier results and suggests that real rigidity increases significantly the mass in the histogram bin containing the mean anticipated rate of inflation, as well as in adjacent bins. Downward nominal wage rigidities and spikes at zero remain important.

Suggested Citation

  • Christofides, Louis N. & Nearchou, Paris, 2007. "Real and Nominal Wage Rigidities in Collective Bargaining Agreements," IZA Discussion Papers 2799, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2799
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    References listed on IDEAS

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    Cited by:

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    2. E. Gautier & D. Fougère & S. Roux, 2016. "The Impact of the National Minimum Wage on Industry-Level Wage Bargaining in France," Working papers 587, Banque de France.
    3. Fougère, Denis & Gautier, Erwan & Roux, Sébastien, 2018. "Wage floor rigidity in industry-level agreements: Evidence from France," Labour Economics, Elsevier, vol. 55(C), pages 72-97.
    4. Julián Messina & Cláudia Filipa Duarte & Mario Izquierdo & Philip Du Caju & Niels Lynggård Hansen, 2010. "The Incidence of Nominal and Real Wage Rigidity: An Individual-Based Sectoral Approach," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 487-496, 04-05.
    5. Christoph Knoppik & Thomas Beissinger, 2009. "Downward nominal wage rigidity in Europe: an analysis of European micro data from the ECHP 1994–2001," Empirical Economics, Springer, vol. 36(2), pages 321-338, May.
    6. Patrick Lünnemann & Ladislav Wintr, 2010. "Downward wage rigidity and automatic wage indexation: Evidence from monthly micro wage data," BCL working papers 48, Central Bank of Luxembourg.
    7. Fella Giulio, 2012. "Matching, Wage Rigidities and Efficient Severance Pay," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-35, December.

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    More about this item

    Keywords

    nominal wage rigidities; real;

    JEL classification:

    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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