It is sometimes argued that resistance to nominal wage cuts would justify a moderate amount of inflation in order to “grease the wheels of the labour market”. While empirical studies tend to find that nominal wages are not downwardly rigid in Anglo-Saxon economies, a number of studies suggest that downward nominal wage rigidity is more widespread among continental European countries. This paper...

We use administrative data from the unemployment insurance system of the Sate of Washington to study the magnitude of the wage differential associated with work in the temporary services industry. We find that temp wage rates are 15% to 20% below the levels that might have been expected based on trends during other periods in workers’ careers even after controlling for differences between temps...

Unit labor cost (ULC) is defined as labor compensation per value added. It captures the cost competitiveness of industries and countries. As labor compensation is wage multiplied by hours worked or number of people employed, it is easy to show that ULC is wage divided by labor productivity. Thus, changes in ULC are often discussed in the context of wage increases and labor productivity. However...

The Effect of the Minimum Wage on Prices in Brazil There is very little empirical evidence on the effects of the minimum wage on prices in the international literature and none whatsoever for developing countries. This paper estimates the minimum wage price effect using monthly Brazilian household and firm data from 1982 to 2000 aggregated at a regional level. Empirical evidence on price effect...