The Rationale for Wage Rigidity: Survey Evidence from German and US Firms

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URL:	https://ub-madoc.bib.uni-mannheim.de/385
URN:	urn:nbn:de:bsz:180-madoc-3858
Document Type:	Working paper
Year of publication:	2002
The title of a journal, publication series:	None
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: J41 J51 K31 ,
Subject headings (SWD):	USA , Deutschland , Lohn , Humankapital , Arbeitsvertrag
Abstract:	The study provides evidence for the rationale of wage rigidity in Germany compared to the United States. Based on a survey of 801 firms, we extend the study of Campbell and Kanlani (1997, this journal) by using more thorough econometric methods, for example, and find strong support for explanations based on labor union contracts and implicit wages for Germany. Furthermore, survey respondents indicated that labor union contracts and implicit contracts are important reasons for wage rigidity for the (less) skilled. Specific human capital and negative signals for new hires are important reasons for the highly skilled. In contrast to the US experience for German firms insider-outsider behavior, labor union contracts and specific human capital seem to be more important explanations of wage rigidity.
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