Brzoza-Brzezina, Michal and Socha, Jacek (2006): Downward nominal wage rigidity in Poland.
Download (282kB) | Preview
We use data on enterprise level from a survey of medium sized and big companies to test for downward nominal wage rigidity in Poland. We find relatively weak support for downward nominal wage rigidity when average total compensation in the enterprise is taken into account. However, since this result may be affected by job rotation, we propose a method for eliminating its impact and find that downward wage rigidity becomes higher. Moreover, disaggregating the data reveals strong differences between sectors, with no rigidity in highly competitive branches and significant rigidities in monopolized or state-owned sectors. Still, the amount of downward nominal wage rigidity seems lower than in other countries, although, due to differences in data sets, robust comparisons are not possible.
|Item Type:||MPRA Paper|
|Original Title:||Downward nominal wage rigidity in Poland|
|Keywords:||Downward nominal wage rigidity; Poland; inflation|
|Subjects:||E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level; Inflation; Deflation
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J30 - General
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E24 - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
|Depositing User:||Michal Brzoza-Brzezina|
|Date Deposited:||15. Nov 2006|
|Last Modified:||12. Feb 2013 20:45|
Adam, K., Billi, R.M. 2004 a. „Optimal Monetary Policy Under Commitment with a Zero Bound on Nominal Interest Rates”, ECB WP 377, European Central Bank, Frankfurt. Adam, K., Billi, R.M. 2004 b. „Optimal Monetary Policy Under Discretion with a Zero Bound on Nominal Interest Rates”, ECB WP 380, European Central Bank, Frankfurt. Altonji, Joseph G. and Devereux, Paul J. 2000, 'Is there Nominal Wage Rigidity? Evidence from Panel Data', in: Research in Labor Economics, 19, 383-431. Babetski, I. 2006. Aggregate Wage Flexibility in Selected New EU Member States”, mimeo, Czech National Bank. Borowski, J., Brzoza-Brzezina, M. 2004. “Designing Poland’s Macroeconomic Strategy on the Way to the Euro Area”, EUI Working Paper 2004/10. Caballero Ricardo, Engel Eduardo, John Haltiwanger, 1997, Aggregate Employment Dynamics: Building from Microeconomic Evidence, American Economic Review. Dellas, H., Tavlas, G. 2005. “Wage Rigidity and Monetary Union”, The Economic Journal, 115, pp. 907-927. Dickens, W.T., Goette, L., Groshen, E.L., Holden, S., Messina, J., Schweitzer, M.E., Turunen, J., Ward, M.E. 2006. „How wages change: micro evidence from the International Wage Flexibility Project”, Working Paper No 96, National Bank of Belgium. Dwyer, J., Leong, K. 2000. “Nominal Wage Rigidity in Australia”, Research Discussion Paper 2000-08, Reserve Bank of Australia. Elsby, M.W. 2006. “Evaluating the Economic Significance of Downward nominal Wage rigidity”, NBER Working Paper 12611. Fehr, E., Goette, L. 2000, “Robustness and Real Consequences of Nominal Wage Rigidity”, IERE Working Paper Series 44, May. de Grauwe, P. 2001. “Economics of Monetary Union”, Oxford University Press, Oxford. Holden, S, Wulfsberg, F., 2004. “Downward Nominal Wage Rigidity in Europe”, CESifo Working Paper 1177. Holden, S, Wulfsberg, F., 2005. “Downward Nominal Wage Rigidity in the OECD”, Norges Bank Working Paper No. 2004/5. Kahn, Shulamit (1997), 'Evidence of Nominal Wage Stickiness from Microdata', in: American Economic Review, 87(5), 993-1008. Knoppik, C., Beissinger, T. 2005. “Downward Nominal Wage Rigidity in Europe: An Analysis of European Micro Data from the ECHP 1994-2001”, IZA Discussion Paper 1492, IZA, Bonn. Lebow, D.E., Saks, R.E., Wilson, B.A. 2003, “Downward Nominal Wage Rigidity: Evidence from the Employment Cost Index”, in: Advances in Macroeconomics, 3(1). NBP 2003. “Monetary Policy Strategy Beyond 2003”, National Bank of Poland, Warsaw. NBP 2004. “A Report on Costs and Benefits of Poland’s Adoption of the Euro”, ed. J.Borowski, National Bank of Poland, Warsaw. Vermeulen, P. 2006. “Employment Stickiness in Small Manufacturing Firms”, Working Paper 640, European Central Bank, Frankfurt. Yamaguchi, S. 2005. “Wage Flexibility in Turbulent Times: A Practitioner’s Guide, with an Application to Poland”, IMF WP/05/134.