| 来源类型 | Discussion paper
|
| 规范类型 | 论文
|
| 来源ID | DP10288
|
| DP10288 A Theory of Wage Adjustment under Loss Aversion |
| Dennis Snower
|
| 发表日期 | 2014-12-07
|
| 出版年 | 2014
|
| 语种 | 英语
|
| 摘要 | We present a new theory of wage adjustment, based on worker loss aversion. In line with prospect theory, the workers? perceived utility losses from wage decreases are weighted more heavily than the perceived utility gains from wage increases of equal magnitude. Wage changes are evaluated relative to an endogenous reference wage, which depends on the workers? rational wage expectations from the recent past. By implication, employment responses are more elastic for wage decreases than for wage increases and thus firms face an upward-sloping labor supply curve that is convexly kinked at the workers? reference price. Firms adjust wages flexibly in response to variations in labor demand. The resulting theory of wage adjustment is starkly at variance with past theories. In line with the empirical evidence, we find that (1) wages are completely rigid in response to small labor demand shocks, (2) wages are downward rigid but upward flexible for medium sized labor demand shocks, and (3) wages are relatively downward sluggish for large shocks. |
| 主题 | Labour Economics
|
| 关键词 | Downward wage sluggishness
Loss aversion
|
| URL | https://cepr.org/publications/dp10288
|
| 来源智库 | Centre for Economic Policy Research (United Kingdom)
|
| 资源类型 | 智库出版物
|
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/539120
|
推荐引用方式
GB/T 7714 |
Dennis Snower. DP10288 A Theory of Wage Adjustment under Loss Aversion. 2014.
|
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