How selective are real wage cuts? : a micro-analysis using linked employer-employee data


Hirsch, Boris ; Zwick, Thomas


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URL: https://ub-madoc.bib.uni-mannheim.de/35206
URN: urn:nbn:de:bsz:180-madoc-352069
Document Type: Working paper
Year of publication: 2013
The title of a journal, publication series: ZEW Discussion Papers
Volume: 13-086
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: J30 , J31,
Keywords (English): Real wage rigidity , real wage cuts , selectivity , Germany
Abstract: Using linked employer–employee panel data for Germany, this paper investigates whether firms implement real wage reductions in a selective manner. In line with insider–outsider and several strands of efficiency wage theory, we find strong evidence for selective wage cuts with high-productivity workers being spared even when controlling for permanent differences in firms’ wage policies. In contrast to some recent contributions stressing fairness considerations, we also find that wage cuts increase wage dispersion among peers rather than narrowing it. Notably, the same selectivity pattern shows up when restricting our analysis to firms covered by collective agreements or having a works council.

Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Hirsch, Boris ; Zwick, Thomas (2013) How selective are real wage cuts? : a micro-analysis using linked employer-employee data. Open Access ZEW Discussion Papers Mannheim 13-086 [Working paper]
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