A shred of evidence on theories of wage stickiness

Alan S. Blinder, Don H. Choi

Research output: Contribution to journalArticle

171 Scopus citations

Abstract

A small interview survey was undertaken to see how actual wage–setters would react to the central ideas of several economic theories of wage stickiness. Wage cuts were surprisingly prevalent in recent years, despite the booming economy. The strongest finding was that managers believe that perceptions of fairness play major motivational role in labor markets and that a "fair" wage policy is a good deal more complicated than simply not cutting wages. We also found substantial evidence for money illusion and against the adverse–selection version of the efficiency wage model.

Original languageEnglish (US)
Pages (from-to)1003-1015
Number of pages13
JournalQuarterly Journal of Economics
Volume105
Issue number4
DOIs
StatePublished - Nov 1990

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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