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Downward Wage Rigidities in Slovakia

Author

Listed:
  • Pavel Gertler

    (Research Department, National Bank of Slovakia)

  • Matus Senaj

    (Research Department, National Bank of Slovakia)

Abstract
The concept of wage flexibility is especially important for economic policies after the Slovak euro adoption. The aim of this study is to assess the extent of wage rigidities in Slovakia. We first reproduce Holden and Wulfsberg (2007) approach with data on industrial level drawn from recent decade and we include both old and new EU Member States countries. In case of Slovakia, however it is difficult to interpret results obtained from sectoral data, since too few negative observations are present in the sample. We therefore turn to micro-approach and apply slightly modified methodology on the company level data. The estimated extent of both nominal and real rigidity is relatively small. Conclusion that hourly compensations are rather flexible supports the decision of euro adoption in 2009.

Suggested Citation

  • Pavel Gertler & Matus Senaj, 2008. "Downward Wage Rigidities in Slovakia," Working and Discussion Papers WP 7/2008, Research Department, National Bank of Slovakia.
    • Handle: RePEc:svk:wpaper:1003
    as

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    References listed on IDEAS

    as
    1. Holden Steinar & Wulfsberg Fredrik, 2008. "Downward Nominal Wage Rigidity in the OECD," The B.E. Journal of Macroeconomics, De Gruyter, vol. 8(1), pages 1-50, April.
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    Cited by:

    1. Marianna Cervena, 2012. "Base Wage Rigidities: Evidence From a Survey of Slovak Firms," Working and Discussion Papers WP 3/2012, Research Department, National Bank of Slovakia.
    2. Daniel Němec, 2013. "Investigating Differences Between the Czech and Slovak Labour Market Using a Small DSGE Model with Search and Matching Frictions," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 7(1), pages 021-041, March.
    3. Pavel Gertler, 2010. "The wage curve: A panel data view of labour market segments," Working and Discussion Papers WP 3/2010, Research Department, National Bank of Slovakia.
    4. Marianna Cervena, 2012. "Labor Cost Adjustment: Evidence From a Survey of Slovak Firms," Working and Discussion Papers WP 4/2012, Research Department, National Bank of Slovakia.
    5. Sandra Tatierska, 2010. "Do Unit Labor Cost Drive Inflation in the Euro Area?," Working and Discussion Papers WP 2/2010, Research Department, National Bank of Slovakia.

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    More about this item

    Keywords

    nominal and real wage rigidity; Slovakia;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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