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Instituto Superior de Economia e Gestão (ISEG)


ISEG 2S SEMINARS | Wage rigidity and employment adjustment at the firm level: evidence from survey data

Em 09-11-2012 das 11:30 às 13:00 / Room Delta

Wage rigidity and employment adjustment at the firm level: evidence from survey data
Jointly with DE Seminars

Fernando Manuel Martins
Banco de Portugal

This paper uses firm level survey data from Portugal to investigate how firms adjust their labour costs in the presence of wage rigidities. We document that Portuguese firms, besides reducing employment or freezing nominal base wages, also make frequent use of other cost-cutting strategies, like freezing or cutting bonus and other monetary or non-monetary benefits, slowing down or freezing the rate at which promotions are filled, or recruiting new employees at wages lower than those received by the employees that have left the firm. We show that the utilization of these different adjustment strategies is affected by workers' and firms' attributes, as well as by some indicators of the economic environment in which firms operate. More importantly, we provide evidence that firms with
more exible base wages are less likely to reduce employment, and that such effect may be significantly strengthened by the availability of alternative labour-cost adjustment margins that firms can use in bad times.

The speakers will be at ISEG during the afternoon after the talk, Professors and researchers interested in meeting the speaker should check the available meeting slots with the organizing team .
To join the ISEG 2S Seminar Mailing List and receive regular information contact Filomena Ferreira.

p.s. If you come to the seminars by car, assure your entrance to the park.