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- W2129656565 abstract "Abstract This paper provides a theoretical and empirical analysis of the effect of performance-based layoffs on wage rigidity in the context of performance pay. In the model, it becomes optimal for firms to raise future regular pay to maintain workers’ current efforts, which results in downwardly rigid regular pay under the threat of performance-based layoffs. Furthermore, it becomes optimal for firms to base wages less on workers’ performance during recessions due to the lower value of productivity. Consequently, wages during recessions also become “rigid” (inflexible) with respect to performance. The Japanese panel dataset supported these theoretical implications. JEL codes J30; J33; J63" @default.
- W2129656565 created "2016-06-24" @default.
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- W2129656565 date "2014-08-29" @default.
- W2129656565 modified "2023-10-16" @default.
- W2129656565 title "Why do wages become more rigid during a recession than during a boom?" @default.
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- W2129656565 doi "https://doi.org/10.1186/2193-8997-3-6" @default.
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