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The margins of labour costs adjustment: Survey evidence from European firms. National Bank of Belgium Working Paper No. 183, November 2009

Babecky, Jan and Du Caju, Philip and Kosma, Theodora and Lawless, Martina and Messina, Julian and Room, Tairi. (2009) The margins of labour costs adjustment: Survey evidence from European firms. National Bank of Belgium Working Paper No. 183, November 2009. [Working Paper]

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    Abstract

    Firms have multiple options at the time of adjusting their wage bills. However, previous literature has mainly focused on base wages. We broaden the analysis beyond downward rigidity in base wages by investigating the use of other margins of labour cost adjustment at the firm level. Using data from a unique survey, we find that firms make frequent use of other, more flexible, components of compensation to adjust the cost of labour. Changes in bonuses and non-pay benefits are some of the potential margins firms use to reduce costs. We also show how the margins of adjustment chosen are affected by firm and worker characteristics.

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    Item Type: Working Paper
    Subjects for non-EU documents: Countries > Ireland
    Countries > Belgium
    Countries > Italy
    Countries > Estonia
    Countries > Lithuania
    Countries > Slovenia
    Countries > France
    Countries > Greece
    Countries > Poland
    Countries > Hungary
    Countries > Portugal
    EU policies and themes > Policies & related activities > employment/labour market > labour/labor
    Countries > Czech Republic
    EU policies and themes > Policies & related activities > economic and financial affairs > business/private economic activity
    Subjects for EU documents: UNSPECIFIED
    EU Series: UNSPECIFIED
    ["eprint_fieldname_eusries" not defined]: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > National Bank of Belgium (Brussels) > Working Papers
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 20 Jan 2010
    Page Range: p. 42
    Last Modified: 15 Feb 2011 18:20
    URI: http://aei.pitt.edu/id/eprint/12372

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