How selective are real wage cuts? A micro-analysis using linked employer–employee data
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In: Labour - Review of labour economics and industrial relations, Vol. 29, No. 4, 01.12.2015, p. 327-347.
Research output: Journal contributions › Journal articles › Research › peer-review
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TY - JOUR
T1 - How selective are real wage cuts?
T2 - A micro-analysis using linked employer–employee data
AU - Hirsch, Boris
AU - Zwick, Thomas
PY - 2015/12/1
Y1 - 2015/12/1
N2 - Using linked employer-employee panel data for Germany, we investigate 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. © 2015 CEIS, Fondazione Giacomo Brodolini and John Wiley
AB - Using linked employer-employee panel data for Germany, we investigate 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. © 2015 CEIS, Fondazione Giacomo Brodolini and John Wiley
KW - Economics
UR - http://www.scopus.com/inward/record.url?scp=84946474843&partnerID=8YFLogxK
UR - https://www.mendeley.com/catalogue/e8316438-61bf-33b2-ba23-0e4bfc6f71a7/
U2 - 10.1111/labr.12063
DO - 10.1111/labr.12063
M3 - Journal articles
VL - 29
SP - 327
EP - 347
JO - Labour - Review of labour economics and industrial relations
JF - Labour - Review of labour economics and industrial relations
SN - 1121-7081
IS - 4
ER -