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Shocks and wage adjustments
[Chocs économiques et ajustements salariaux]

Author

Listed:
  • Berson Clémence
Abstract
Economic research – How did European companies react to the demand shock during the European sovereign debt crisis? This article attempts to answer this question using two recent studies based on company survey data from 25 European Union countries over the 2010-13 period. The main results of these studies are that firms face downward nominal base wage rigidities, which increase lay-offs when firms have to adjust to a negative demand shock. Moreover, firms preferably use non-base wage components whenever possible, which highlights their role as a shock absorber during this period. The lockdown adopted in almost all European countries due to the Covid-19 pandemic triggered both a demand shock and a supply shock. Consequently, the relationship between employment and wages may be different to what we observed in 2013 for a demand shock. De quelle façon les entreprises européennes ont-elles réagi au choc de demande lors de la crise européenne de la dette souveraine ? C’est la question à laquelle le présent article tente de répondre, en s’appuyant sur deux études récentes utilisant une enquête menée auprès d’entreprises de 25 pays de l’Union européenne et portant sur la période 2010-2013. Il ressort principalement de ces études que les entreprises sont confrontées à des rigidités à la baisse des salaires de base nominaux, avec pour corollaire une augmentation des licenciements lors d’un choc de demande négatif. En outre, les entreprises préfèrent généralement adapter les composantes variables des salaires lorsque cela est possible, ce qui confère à celles-ci le rôle d’amortisseur pendant cette période. Le confinement instauré dans quasiment tous les pays européens face à la pandémie de Covid-19 a provoqué simultanément un choc de demande et un choc d’offre. En conséquence, la relation entre l’emploi et les salaires pourrait être différente de celle observée en 2013 en présence d’un seul choc de demande.

Suggested Citation

  • Berson Clémence, 2020. "Shocks and wage adjustments [Chocs économiques et ajustements salariaux]," Bulletin de la Banque de France, Banque de France, issue 231.
    • Handle: RePEc:bfr:bullbf:2020:231:01
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    References listed on IDEAS

    as
    1. Philip Du Caju & Theodora Kosma & Martina Lawless & Julián Messina & Tairi Rõõm, 2015. "Why Firms Avoid Cutting Wages," ILR Review, Cornell University, ILR School, vol. 68(4), pages 862-888, August.
    2. Marotzke Petra & Anderton Robert & Bairrao Ana & Berson Clémence & Tóth Peter, 2020. "Asymmetric wage adjustment and employment in European firms," The B.E. Journal of Macroeconomics, De Gruyter, vol. 20(2), pages 1-25, June.
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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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