Open seminar „Wage Adjustment and Employment in Europe“

Thursday, 29. September 2016 - 11:00 to 12:30
Eesti Pank Museum, Estonia pst 11, Tallinn

At 11–12:30, an open seminar in the Eesti Pank Museum: Petra Marotzke from Deutsche Bundesbank speaks about the study Wage Adjustment and Employment in Europe. The seminar is held in English.

Please register by 5 p.m. on 27 September by emailing eve.magin [at] or calling668 0758.

Wage Adjustment and Employment in Europe
P. Marotzke, R. Anderton, A. Bairrao, C. Berson, and P. Tóth)

We explore the impact of wage adjustment on employment with a focus on the role of downward nominal wage rigidities. We use a harmonised survey dataset, which covers 25 European countries in the period 2010-2013. The main advantages of the data are firm-level information on the change in economic conditions and collective pay agreements. Our findings confirm the presence of wage rigidities in Europe: first, collective pay agreements reduce the probability of downward wage adjustment; second, the rise in the probability of downward base wage responses to a decrease in demand is significantly smaller than the rise in the probability of an upward wage response to an increase in demand. Estimation results point to a negative effect of downward wage rigidities on employment at the firm level.