Abstract
Using data for hourly nominal wages at industry level, we explore the existence of DNWR on industry wages in 19 OECD countries, over the period 1973–1999. Based on a novel method, we reject the hypothesis of no DNWR.
The fraction of wage cuts prevented due to DNWR has fallen over time, from 61 percent in the 1970s to 16 percent in the late 1990s, but the number of industries affected by DNWR has increased.
DNWR is more prevalent when unemployment is low, union density is high, and employment protection legislation is strict.
Working Papers: CESifo Working Paper No. 2009; ECB Working Paper 777 (July 2007); Norges Bank WP 2004/05; CESifo DP 1177; and University of Oslo Memorandum 10/2005.
Presentations: ESEM 2003, SOLE/EALE world congress 2005, Uppsala Universitet, IZA, ECB/CEPR Labour Market Workshop 2006 and Federal Reserve Bank of Boston 2007.
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