The Margins of Labor Cost Adjustment : Survey Evidence from European Firms
Firms have multiple options at the time of adjusting their wage bills. However, previous literature has mainly focused on base wages. This paper broadens the analysis beyond downward rigidity in base wages by investigating the use of other margins...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2009/12/11561638/margins-labor-cost-adjustment-survey-evidence-european-firms http://hdl.handle.net/10986/19954 |
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okr-10986-199542021-04-23T14:03:52Z The Margins of Labor Cost Adjustment : Survey Evidence from European Firms Babecky, Jan Du Caju, Philip Kosma, Theodora Lawless, Martina Messina, Julian Room, Tairi AFFECTED WORKERS BRANCHES CENTRAL BANK CENTRAL BANKS COLLECTIVE AGREEMENTS COLLECTIVE BARGAINING COMPANY COMPETITIVE PRESSURES COMPETITOR DIFFERENTIATED IMPACT EARLY RETIREMENT EARNING ECONOMETRIC ANALYSIS ECONOMIC ACTIVITY ECONOMIC SHOCKS EMPLOYEE EMPLOYMENT ENVIRONMENTS EXOGENOUS SHOCKS EXPORTS FIRM LEVEL FIRM SIZE FIRM SURVEY FIRMS HIGH WAGE HUMAN RESOURCES INDEXATION INFLATION INTERNATIONAL MARKETS LABOR COST LABOR COSTS LABOR DEMAND LABOR ECONOMICS LABOR MARKETS LABOUR LABOUR COST LABOUR COSTS LABOUR FORCE LABOUR MARKET LABOUR MARKET INSTITUTIONS LABOUR MARKETS LABOUR RELATIONS LABOUR TURNOVER MACROECONOMIC PERFORMANCE MACROECONOMICS MARGINAL COSTS MENU COSTS MONETARY POLICY MOTIVATION NOMINAL WAGES NON-WAGE COST PERMANENT WORKERS POLITICAL ECONOMY PREVIOUS SECTION PRICE CHANGES PROBIT REGRESSIONS PRODUCT MARKET PRODUCT MARKET COMPETITION REAL WAGE REAL WAGES RETIREMENT STICKY PRICES TEMPORARY WORKERS TOTAL COSTS TOTAL WAGE UNEMPLOYMENT UNION ACTIVITY WAGE ADJUSTMENT WAGE BARGAINING WAGE BILL WAGE FLEXIBILITY WAGE LEVEL WAGE NEGOTIATIONS WAGE RIGIDITIES WAGE RIGIDITY WAGE STRUCTURE WHITE COLLAR WORKERS WORK ORGANISATION WORKER WORKERS YOUNGER WORKERS Firms have multiple options at the time of adjusting their wage bills. However, previous literature has mainly focused on base wages. This paper broadens the analysis beyond downward rigidity in base wages by investigating the use of other margins of labor cost adjustment at the firm level. Using data from a unique survey, the authors find that firms make frequent use of other, more flexible, components of compensation to adjust the cost of labor. Changes in bonuses and non-pay benefits are some of the potential margins firms use to reduce costs. The paper also shows how the margins of adjustment chosen are affected by firm and worker characteristics. 2014-09-02T21:41:32Z 2014-09-02T21:41:32Z 2009-12 http://documents.worldbank.org/curated/en/2009/12/11561638/margins-labor-cost-adjustment-survey-evidence-european-firms http://hdl.handle.net/10986/19954 English en_US Policy Research Working Paper;No. 5160 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Europe and Central Asia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
AFFECTED WORKERS BRANCHES CENTRAL BANK CENTRAL BANKS COLLECTIVE AGREEMENTS COLLECTIVE BARGAINING COMPANY COMPETITIVE PRESSURES COMPETITOR DIFFERENTIATED IMPACT EARLY RETIREMENT EARNING ECONOMETRIC ANALYSIS ECONOMIC ACTIVITY ECONOMIC SHOCKS EMPLOYEE EMPLOYMENT ENVIRONMENTS EXOGENOUS SHOCKS EXPORTS FIRM LEVEL FIRM SIZE FIRM SURVEY FIRMS HIGH WAGE HUMAN RESOURCES INDEXATION INFLATION INTERNATIONAL MARKETS LABOR COST LABOR COSTS LABOR DEMAND LABOR ECONOMICS LABOR MARKETS LABOUR LABOUR COST LABOUR COSTS LABOUR FORCE LABOUR MARKET LABOUR MARKET INSTITUTIONS LABOUR MARKETS LABOUR RELATIONS LABOUR TURNOVER MACROECONOMIC PERFORMANCE MACROECONOMICS MARGINAL COSTS MENU COSTS MONETARY POLICY MOTIVATION NOMINAL WAGES NON-WAGE COST PERMANENT WORKERS POLITICAL ECONOMY PREVIOUS SECTION PRICE CHANGES PROBIT REGRESSIONS PRODUCT MARKET PRODUCT MARKET COMPETITION REAL WAGE REAL WAGES RETIREMENT STICKY PRICES TEMPORARY WORKERS TOTAL COSTS TOTAL WAGE UNEMPLOYMENT UNION ACTIVITY WAGE ADJUSTMENT WAGE BARGAINING WAGE BILL WAGE FLEXIBILITY WAGE LEVEL WAGE NEGOTIATIONS WAGE RIGIDITIES WAGE RIGIDITY WAGE STRUCTURE WHITE COLLAR WORKERS WORK ORGANISATION WORKER WORKERS YOUNGER WORKERS |
| spellingShingle |
AFFECTED WORKERS BRANCHES CENTRAL BANK CENTRAL BANKS COLLECTIVE AGREEMENTS COLLECTIVE BARGAINING COMPANY COMPETITIVE PRESSURES COMPETITOR DIFFERENTIATED IMPACT EARLY RETIREMENT EARNING ECONOMETRIC ANALYSIS ECONOMIC ACTIVITY ECONOMIC SHOCKS EMPLOYEE EMPLOYMENT ENVIRONMENTS EXOGENOUS SHOCKS EXPORTS FIRM LEVEL FIRM SIZE FIRM SURVEY FIRMS HIGH WAGE HUMAN RESOURCES INDEXATION INFLATION INTERNATIONAL MARKETS LABOR COST LABOR COSTS LABOR DEMAND LABOR ECONOMICS LABOR MARKETS LABOUR LABOUR COST LABOUR COSTS LABOUR FORCE LABOUR MARKET LABOUR MARKET INSTITUTIONS LABOUR MARKETS LABOUR RELATIONS LABOUR TURNOVER MACROECONOMIC PERFORMANCE MACROECONOMICS MARGINAL COSTS MENU COSTS MONETARY POLICY MOTIVATION NOMINAL WAGES NON-WAGE COST PERMANENT WORKERS POLITICAL ECONOMY PREVIOUS SECTION PRICE CHANGES PROBIT REGRESSIONS PRODUCT MARKET PRODUCT MARKET COMPETITION REAL WAGE REAL WAGES RETIREMENT STICKY PRICES TEMPORARY WORKERS TOTAL COSTS TOTAL WAGE UNEMPLOYMENT UNION ACTIVITY WAGE ADJUSTMENT WAGE BARGAINING WAGE BILL WAGE FLEXIBILITY WAGE LEVEL WAGE NEGOTIATIONS WAGE RIGIDITIES WAGE RIGIDITY WAGE STRUCTURE WHITE COLLAR WORKERS WORK ORGANISATION WORKER WORKERS YOUNGER WORKERS Babecky, Jan Du Caju, Philip Kosma, Theodora Lawless, Martina Messina, Julian Room, Tairi The Margins of Labor Cost Adjustment : Survey Evidence from European Firms |
| geographic_facet |
Europe and Central Asia |
| relation |
Policy Research Working Paper;No. 5160 |
| description |
Firms have multiple options at the time
of adjusting their wage bills. However, previous literature
has mainly focused on base wages. This paper broadens the
analysis beyond downward rigidity in base wages by
investigating the use of other margins of labor cost
adjustment at the firm level. Using data from a unique
survey, the authors find that firms make frequent use of
other, more flexible, components of compensation to adjust
the cost of labor. Changes in bonuses and non-pay benefits
are some of the potential margins firms use to reduce costs.
The paper also shows how the margins of adjustment chosen
are affected by firm and worker characteristics. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Babecky, Jan Du Caju, Philip Kosma, Theodora Lawless, Martina Messina, Julian Room, Tairi |
| author_facet |
Babecky, Jan Du Caju, Philip Kosma, Theodora Lawless, Martina Messina, Julian Room, Tairi |
| author_sort |
Babecky, Jan |
| title |
The Margins of Labor Cost Adjustment : Survey Evidence from European Firms |
| title_short |
The Margins of Labor Cost Adjustment : Survey Evidence from European Firms |
| title_full |
The Margins of Labor Cost Adjustment : Survey Evidence from European Firms |
| title_fullStr |
The Margins of Labor Cost Adjustment : Survey Evidence from European Firms |
| title_full_unstemmed |
The Margins of Labor Cost Adjustment : Survey Evidence from European Firms |
| title_sort |
margins of labor cost adjustment : survey evidence from european firms |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2009/12/11561638/margins-labor-cost-adjustment-survey-evidence-european-firms http://hdl.handle.net/10986/19954 |
| _version_ |
1764444148222394368 |