A Shred Of Evidence On Theories Of Wage Stickiness

Download or read book A Shred of Evidence on Theories of Wage Stickiness written by Alan S. Blinder and published by . This book was released on 1989 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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 a 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.