When are wages cut? The roles of incomplete contracts and employee involvement
| Autor: | Fongoni, Marco, Schaefer, Daniel, Singleton, Carl |
|---|---|
| Přispěvatelé: | Aix-Marseille Sciences Economiques (AMSE), École des hautes études en sciences sociales (EHESS)-Aix Marseille Université (AMU)-École Centrale de Marseille (ECM)-Centre National de la Recherche Scientifique (CNRS), Johannes Kepler Universität Linz - Johannes Kepler University Linz [Autriche] (JKU), University of Reading (UOR), The Economic and Social Research Council and Administrative Data Research UK for the funding support of the Wage and Employment Dynamics project (ES/T013877/1), Support of the Department of Economics at the University of Strathclyde at an early stage of this project, ANR-17-EURE-0020,AMSE (EUR),Aix-Marseille School of Economics(2017), ANR-11-IDEX-0001,Amidex,INITIATIVE D'EXCELLENCE AIX MARSEILLE UNIVERSITE(2011) |
| Jazyk: | angličtina |
| Rok vydání: | 2023 |
| Předmět: |
Employer-employee data
Workplace relations Reciprocity JEL: J - Labor and Demographic Economics/J.J3 - Wages Compensation and Labor Costs/J.J3.J31 - Wage Level and Structure • Wage Differentials Wage rigidity JEL: E - Macroeconomics and Monetary Economics/E.E7 - Macro-Based Behavioral Economics/E.E7.E70 - General [SHS.ECO]Humanities and Social Sciences/Economics and Finance JEL: E - Macroeconomics and Monetary Economics/E.E2 - Consumption Saving Production Investment Labor Markets and Informal Economy/E.E2.E24 - Employment • Unemployment • Wages • Intergenerational Income Distribution • Aggregate Human Capital • Aggregate Labor Productivity JEL: J - Labor and Demographic Economics/J.J4 - Particular Labor Markets/J.J4.J41 - Labor Contracts |
| Popis: | We develop a model of incomplete employment contracts such that employees have some discretion over effort, which depends on their work morale. Nominal wage cuts have a strong negative effect on morale, while employee involvement in workplace decision-making tends to increase morale. We derive predictions on how these two mechanisms affect the decisions of firms to cut nominal wages. Using matched employer-employee and manager survey data from Great Britain, we find support for our model: nominal wage cuts are only half as likely when managers think that employees have some discretion over how they perform their work, but this reduced likelihood recovers partially when employees are involved in the decision-making process at their workplace. |
| Databáze: | OpenAIRE |
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