This paper investigates wage dynamics assuming the potential presence of dual wage stickiness: with respect to both the frequency as well as the size of wage adjustments. In particular, this paper proposes a structural model of wage inflation dynamics assuming that although workers adjust wage contracts at discrete time intervals, they are limited in their abilities to adjust wages as much as t...

A New Model of Wage Determination and Wage Inequality This paper proposes a new model of wage determination and wage inequality. In this model, wage-setters set workers’ wages; they do so either directly, as when individuals vote in a salary committee, or indirectly, as when political parties, via the myriad of social, economic, fiscal, and other policies, generate wages. The recommendations ma...

Social Comparison and Performance: Experimental Evidence on the Fair Wage-Effort Hypothesis We investigate the impact of wage comparisons for worker productivity. We present three studies which all use three-person gift-exchange experiments. Consistent with Akerlof and Yellen’s (1990) fair wage-effort hypothesis we find that disadvantageous wage discrimination leads to lower efforts while advan...

Piece rate and performance based wage systems are common in the construction industry. Construction workers are known to have an increased risk of pain and musculoskeletal disorders (MSD). In this cross-sectional questionnaire study, we examined the association between wage system and (1) physical exertion, (2) time pressure, (3) pain, and (4) fatigue. The participants comprised 456 male Danish...

A Contribution to the Empirics of Reservation Wages This paper provides evidence on the behavior of reservation wages over the spell of unemployment using high‐frequency longitudinal data. Using data from our survey of unemployed workers in New Jersey, where workers were interviewed each week for up to 24 weeks, we find that self‐reported reservation wages decline at a modest rate over the spel...

The Effects of the State Sector on Wage Inequality in Urban China: 1988–2007 This paper examines the effects of state sector domination on wage inequality in urban China. Using Chinese Household Income Project surveys, we conduct two exercises: with quantile regression analysis, we identify wage gaps across the distribution and over time; and we employ the Machado and Mata (2005) decomposition ...

Gender wage and employment gaps are negatively correlated across countries. We argue that non-random selection of women into work explains an important part of such correlation and thus of the observed variation in wage gaps. The idea is that, if women who are employed tend to have relatively high-wage characteristics, low female employment rates may become consistent with low gender wage gaps ...

We assess the differences in downward nominal and real wage rigidity between natives and immigrants in Portugal, using a matched employer-employee database and the International Wage Flexibility Project (IWFP) methodology. This methodology estimates a notional or counterfactual distribution that would prevail under wage flexibility and compares it to the empirical wage distribution. The estimat...

I study a labor market in which identical workers search on- and off-the-job heterogeneous firms employ using either an ex-ante posted wage or flexible contracts contingent on outside options. Firm level costs for generate segmented equilibrium less productive post wages. The model with can achieve dispersion, share, employment transitions, flow value of unemployment that are simultaneously con...

This paper analyzes the impact of indexed wage contracts on inflation and social welfare in a Barro–Gordon model with state contingent monetary policy. Wage indexation reduces the inflation bias but may raise the variance of inflation rates. In social optimum wages are fully indexed to the price level, but this requires optimal wage adjustments to productivity shocks. If wage adjustments to pro...