Titel
Can reference points explain wage rigidity? Experimental evidence
Autor*in
Abstract
I examine whether reference points can provide an explanation for rigid wages in recessions. Even though a recession provides a good reason to adjust wages downward, workers’ perception of a “fair wage” may depend on their previous wage, their reference point. Using a laboratory experiment, I test this idea by varying whether initially concluded contracts—and their stipulated wages—can serve as reference points. My experimental results show that with initial contracts workers punish wage cuts even in recessions, leading to considerable more rigid wages. Surprisingly, this is even true without an “objective” justification to feel entitled to initial contracts.
Stichwort
Wage rigidityReference pointsGift exchangeLabor contractsExperiments
Objekt-Typ
Sprache
Englisch [eng]
Persistent identifier
Erschienen in
Titel
Journal for Labour Market Research
Band
55
ISSN
2510-5019
Erscheinungsdatum
2021
Publication
Springer Science and Business Media LLC
Erscheinungsdatum
2021
Zugänglichkeit
Rechte
Rechteangabe
© The Author(s) 2021
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