Lohnstarrheit / Wage Rigidity
In Krisenzeiten greifen Arbeitgeberinnen und Arbeitgeber eher auf Entlassungen als auf das Mittel der Nominallohnsenkung zurück. Dies kann am Einfluss der Gewerkschaften, an unflexiblen Lohnsystemen der Firmen oder auch an Fairnessnormen liegen. Welche Auswirkungen haben nach unten starre Löhne auf dem Arbeitsmarkt? Führen sie in Verbindung mit einer niedrigen Inflationsrate zu höherer Arbeitslosigkeit? Diese IAB-Infoplattform präsentiert wissenschaftliche Literatur zum Thema Abwärtslohnrigidität.
In times of crisis, employers tend to resort to dismissals instead of the medium of reduction in nominal wages. This may be due to the influence of the trade unions, the inflexibility of company wage systems, or possibly also norms of fairness. What effect do downwardly rigid wages have on the labour market? Do they lead - in conjunction with a lower inflation rate - to higher unemployment? This IAB info platform presents scientific literature on the topic of downward wage rigidity.
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Literaturhinweis
Informal Incentives and Labour Markets (2025)
Fahn, Matthias; Murooka, Takeshi;Zitatform
Fahn, Matthias & Takeshi Murooka (2025): Informal Incentives and Labour Markets. In: The Economic Journal, Jg. 135, H. 665, S. 144-179. DOI:10.1093/ej/ueae063
Abstract
"This paper investigates how labor-market tightness affects market outcomes if firms use informal, self-enforcing, agreements to motivate workers. We characterize profit-maximising equilibria and show that an increase in the supply of homogeneous workers can increase wages. Moreover, even though all workers are identical in terms of skills or productivity, profit-maximising discrimination equilibria exist. There, a group of majority workers is paid higher wages than a group of minority workers, who may even be completely excluded. Minimum wages can reduce such discrimination and increase employment. We discuss how these results relate to empirical evidence on downward wage rigidity, immigration, the gender pay gap, and credentialism." (Author's abstract, IAB-Doku) ((en))
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Literaturhinweis
Downward wage rigidity and asymmetric effects of monetary policy (2025)
Zitatform
Jackson, Laura E. & Ezgi Kurt (2025): Downward wage rigidity and asymmetric effects of monetary policy. In: Journal of macroeconomics, Jg. 83. DOI:10.1016/j.jmacro.2024.103645
Abstract
"This paper provides industry-level evidence on the presence of downward real wage rigidity and asymmetric effects of monetary policy in the US labor market. Focusing on industry-level data from 1975q1 to 2020q4, we find strong heterogeneity in the trade-off between wage rigidity and employment. Specifically, we show that service-sector industries show downward-flexible wages and muted employment losses in response to monetary contractions. On the other hand, we find that a trade-off between wage rigidity and employment exists only weakly in the manufacturing sector. We examine this in the context of unionization and trade integration policies of recent decades and show that factors such as low unionization or high exposure to import competition weakens the wage-employment link. Among these, high exposure to trade seems to be the more important channel for manufacturing industries." (Author's abstract, IAB-Doku, © 2024 Elsevier Inc. All rights are reserved, including those for text and data mining, AI training, and similar technologies.) ((en))
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Literaturhinweis
Labor Market Concentration, Wages and Job Security in Europe (2024)
Bassanini, Andrea ; Popp, Martin ; Falco, Paolo ; Oberfichtner, Michael ; Felgueroso, Florentino; Caroli, Eve ; Jansen, Marcel; Cingano, Frederico; Bovini, Giulia; Casanova Ferrando, Jorge; Melo, António ; Martins, Pedro S. ;Zitatform
Bassanini, Andrea, Giulia Bovini, Eve Caroli, Jorge Casanova Ferrando, Frederico Cingano, Paolo Falco, Florentino Felgueroso, Marcel Jansen, Pedro S. Martins, António Melo, Michael Oberfichtner & Martin Popp (2024): Labor Market Concentration, Wages and Job Security in Europe. In: The Journal of Human Resources, S. 1-54. DOI:10.3368/jhr.0223-12757R1
Abstract
"We leverage administrative linked employer-employee data from six European countries to provide the first comparable cross-country evidence on the impact of labor market concentration on wages and job security. We find strikingly similar and relatively low wage elasticities across countries, but greater elasticities for job security, as measured by contract type. We provide suggestive evidence that the similarity of our wage elasticities and the greater sensitivity of job security to labor market concentration may be explained by the fact that sector-level collective bargaining is dominant in the countries we study and that it sets wages but usually not contract type." (Author's abstract, IAB-Doku, © University of Wisconsin Press) ((en))
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Literaturhinweis
Wage reactions to regional and national unemployment (2024)
Zitatform
Blien, Uwe, Jan Mutl, Van Phan thi Hong & Katja Wolf (2024): Wage reactions to regional and national unemployment. In: Regional Science Policy & Practice, Jg. 16, H. 1, 2023-05-02. DOI:10.1111/rsp3.12675
Abstract
"This paper analyses the entire wage effects of unemployment for an especially long observation period. In a three-step approach, the wage reaction at national level (wage setting curve or aggregate wage equation) is added to the reaction at regional level (wage curve). Spatial models with instrumental variables are used." (Author's abstract, IAB-Doku, © Wiley) ((en))
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Literaturhinweis
Wage Rigidity and Employment Outcomes: Evidence from Administrative Data (2024)
Zitatform
Ehrlich, Gabriel & Joshua Montes (2024): Wage Rigidity and Employment Outcomes: Evidence from Administrative Data. In: American Economic Journal. Macroeconomics, Jg. 16, H. 1, S. 147-206. DOI:10.1257/mac.20200125
Abstract
"This paper examines the relationship between downward nominal wage rigidity and employment outcomes using linked employer-employee data. Wage rigidity prevents 27.1 percent of counterfactual wage cuts, with a standard deviation of 19.2 percent across establishments. An establishment with the sample-average level of wage rigidity is predicted to have a 3.3 percentage point higher layoff rate, a 7.4 percentage point lower quit rate, and a 2.0 percentage point lower hire rate. Estimating a structural model by indirect inference implies that the cost of a nominal wage cut is 33 percent of an average worker’s annual compensation. (JEL E24, J23, J31, J63, M51)" (Author's abstract, IAB-Doku) ((en))
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Literaturhinweis
On household labour supply in sticky-wage HANK models (2024)
Gerke, Rafael; Giesen, Sebastian; Röttger, Joost; Lozej, Matija;Zitatform
Gerke, Rafael, Sebastian Giesen, Matija Lozej & Joost Röttger (2024): On household labour supply in sticky-wage HANK models. (Discussion paper / Deutsche Bundesbank 2024,01), Frankfurt am Main, 35 S.
Abstract
"Fragestellung: Neukeynesianische Modelle mit heterogenen Haushalten und trägen Löhnen nehmen gemeinhin an, dass lohnsetzende Gewerkschaften von allen Haushalten die gleiche Menge an Arbeit nachfragen. Unter dieser Annahme berücksichtigen Gewerkschaften nicht, dass (i) Haushalte sich hinsichtlich ihrer Bereitschaft zu arbeiten unterscheiden, und (ii) manche Haushalte unter Umständen mehr arbeiten müssen als sie eigentlich möchten. In dieser Arbeit widmen wir uns den makroökonomischen Konsequenzen von (i) und (ii). Beitrag: Wir betrachten zwei Variationen des weithin verwendeten Modellierungsansatzes, um die Bedeutung von (i) und (ii) herauszuarbeiten. Im ersten Fall betrachten wir eine Modellvariante, in der Gewerkschaften von unterschiedlichen Haushalten unterschiedlich viel Arbeit nachfragen können. Auf diese Weise können Gewerkschaften der Heterogenität der Haushalte hinsichtlich ihrer Produktivität und ihres Vermögens prinzipiell Rechnung tragen, d.h. (i) wird berücksichtigt. Im zweiten Fall erhalten wir die Annahme aufrecht, dass alle Haushalte gleich viel arbeiten. Um (ii) zu berücksichtigen, wird von den Gewerkschaften jedoch verlangt, die Lohnsetzung so vorzunehmen, dass kein Haushalt mehr arbeitet als er möchte. Ergebnisse: Für den Fall unterschiedlich viel arbeitender Haushalte zeigen wir, dass Gewerkschaften es für optimal befinden, die Menge an Arbeitsstunden für sämtliche Haushalte zu beschränken. Dies bedeutet, dass niemand mehr arbeiten muss als er möchte. Diese Modellvariante trägt entsprechend beiden oben genannten Aspekten simultan Rechnung. Indem Gewerkschaften die finanzielle Lage der Haushalte bei der Arbeitsallokation berücksichtigen, kann die Wirkung idiosynkratischer Schocks auf das Budget einzelner Haushalte durch individuelle Anpassungen bei den Arbeitsstunden gesenkt werden. Auf gesamtwirtschaftlicher Ebene senkt diese Absicherungsfunktion individuell angepasster Arbeitsstunden den Effekt makroökonomischer Schocks im Vergleich zum Fall einheitlicher Arbeitsstunden. Hintergrund dieser Unterschiede ist die abgeschwächte Reaktion der gesamten Arbeitsstunden in der Ökonomie. Wenn Gewerkschaften von allen Haushalten die gleiche Menge an Arbeit nachfragen, jedoch über die Lohnsetzung hinreichend Anreize setzen müssen, damit niemand mehr arbeitet als er möchte, kommt es zu nennenswerten Unterschieden im Vergleich zum Referenzfall mit einheitlichem Arbeitsangebot. Insbesondere verhalten sich die Löhne deutlich flexibler, damit sichergestellt ist, dass kein Haushalt mehr arbeitet als er möchte. Infolgedessen reagiert auch die Inflation deutlich sensitiver, weil Firmen die stärkeren Änderungen bei ihren Kosten an die Verbraucher entsprechend weitergeben." (Autorenreferat, IAB-Doku)
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Literaturhinweis
Endogenous job destruction risk and aggregate demand shortages (2024)
Zitatform
Gnocato, Nicolò (2024): Endogenous job destruction risk and aggregate demand shortages. (Temi di discussione / Banca d'Italia 1444), Rom, 58 S.
Abstract
"This paper studies, analytically and quantitatively, the occurrence of demand-deficient recessions due to uninsurable unemployment risk when jobs are endogenously destroyed. The ensuing unemployment fears induce a precautionary saving motive that counteracts the desire to borrow during recessions: negative productivity shocks may cause falling natural interest rates and positive unemployment gaps. Analytically, these demand-deficient recessions are shown to require a lesser degree of real wage rigidity when jobs are destroyed endogenously rather than exogenously. Quantitatively, the demand-deficient nature of supply-driven recessions can only be captured when accounting for endogenous job destruction." (Author's abstract, IAB-Doku) ((en))
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Literaturhinweis
How Cyclical Is the User Cost of Labor? (2024)
Kudlyak, Marianna;Zitatform
Kudlyak, Marianna (2024): How Cyclical Is the User Cost of Labor? (IZA discussion paper / Forschungsinstitut zur Zukunft der Arbeit 16888), Bonn, 22 S., Appendix.
Abstract
"In employment relationships, a wage is an installment payment on an implicit long-term agreement between a worker and a firm. The price of labor that impacts firm's hiring decisions, instead, reflects the hiring wage as well as the impact of economic conditions at the time of hiring on future wages. Measured by the labor's user cost, the price of labor is substantially more pro-cyclical than the new-hire wage or the average wage. The strong procyclicality of the price of labor calls for other forces for cyclical labor demand to explain employment fluctuations." (Author's abstract, IAB-Doku) ((en))
Ähnliche Treffer
spätere (möglicherweise abweichende) Version erschienen in: The Journal of Economic Perspectives, 38 (2024), 2, 159-180Weiterführende Informationen
auch erschienen als: Working Paper Series 2024-10, Federal Reserve Bank of San Francisco -
Literaturhinweis
Automation, Bargaining Power, and Labor Market Fluctuations (2024)
Zitatform
Leduc, Sylvain & Zheng Liu (2024): Automation, Bargaining Power, and Labor Market Fluctuations. In: American Economic Journal. Macroeconomics, Jg. 16, H. 4, S. 311-349. DOI:10.1257/mac.20220181
Abstract
"We argue that the threat of automation weakens workers’ bargaining power in wage negotiations, dampening wage adjustments and amplifying unemployment fluctuations. We make this argument based on a business cycle model with labor market search frictions, generalized to incorporate automation decisions. In the model, procyclical automation threats create endogenous real wage rigidity that amplifies labor market fluctuations. The automation mechanism is consistent with empirical evidence. It is also quantitatively important for explaining the large volatilities of unemployment and vacancies relative to that of real wages, a puzzling observation through the lens of standard business cycle models." (Author's abstract, IAB-Doku) ((en))
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Literaturhinweis
Global managers, local workers: Wage setting inside a multinational firm (2024)
Minni, Virginia;Zitatform
Minni, Virginia (2024): Global managers, local workers: Wage setting inside a multinational firm. (CEP discussion paper / Centre for Economic Performance 1975), London, 18 S.
Abstract
"How are wages set within a multinational firm? Combining cross-country data on wages and labor regulations with personnel records of a large multinational firm, I find that wage setting depends on the rank of the employee in the firm hierarchy. For managers, wages are set by the headquarters regardless of local labor market conditions. For factory workers, wages are adjusted according to country-specific wages and labor regulations. These results suggest that the multinational’s internal labor market shields managers against changes in external market conditions, while the firm adapts to local labor markets for factory workers." (Author's abstract, IAB-Doku) ((en))
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Literaturhinweis
Job security, asymmetric information, and wage rigidity (2024)
Zitatform
Snell, Andy, Heiko Stüber & Jonathan P. Thomas (2024): Job security, asymmetric information, and wage rigidity. In: European Economic Review, Jg. 161, 2023-10-23. DOI:10.1016/j.euroecorev.2023.104622
Abstract
"We consider a labor market with risk averse workers, directed search and asymmetric information in which firms can commit to wage contracts but not to retain workers. The model predicts that in downturns (i) there is equal treatment of incumbents and new hires, (ii) wages are insensitive to the severity of the downturn, (iii) this leads to an amplified employment effect, and (iv) wages are determined by forecasts of labor market conditions rather than actual values. By contrast in upswings, new-hire wages are more attuned to actual conditions than forecasts, whilst incumbent wages remain relatively rigid. We find that these novel predictions are well supported in German administrative data." (Author's abstract, IAB-Doku, © Elsevier) ((en))
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Literaturhinweis
Defining the problem of low wage growth in Australia and Denmark: From the actors' perspectives (2023)
Zitatform
Andersen, Søren Kaj, Chris F. Wright & Russell D. Lansbury (2023): Defining the problem of low wage growth in Australia and Denmark: From the actors' perspectives. In: European journal of industrial relations, Jg. 29, H. 2, S. 177-194. DOI:10.1177/09596801221132424
Abstract
"Low wage growth is a challenge common to many OECD countries including countries with very different institutional systems. This paper utilises and extends Rochefort and Cobb’s (1993) ‘problem definition’ framework to analyse how employer and union representatives in Australia and Denmark explain the causes of low wage growth. Drawing on elite interviews, which allow us to assess the nuance of actors’ perceptions, we find disagreement among Australian actors about the role of the collective bargaining system in contributing to low wage growth. Despite disagreement over the extent of the low wage growth problem in Denmark, both unions and employers expressed confidence in the ability of the bargaining system to resolve it. We argue that the greater degree of consensus in Denmark compared with Australia reflects differences in national institutional systems and knowledge regimes, which have influenced the ways actors in these countries perceive low wage growth." (Author's abstract, IAB-Doku) ((en))
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Literaturhinweis
Minimum Wages, Wage Dispersion and Financial Constraints in Firms (2023)
Zitatform
Arabzadeh, Hamzeh, Almut Balleer, Britta Gehrke & Ahmet Ali Taskin (2023): Minimum Wages, Wage Dispersion and Financial Constraints in Firms. (IZA discussion paper / Forschungsinstitut zur Zukunft der Arbeit 16455), Bonn, 56 S.
Abstract
"This paper studies how minimum wages affect the wage distribution if firms face financial constraints. Using German employer-employee data and firm balance sheets, we document that the within-firm wage dispersion decreases more with higher minimum wages when firms are financially constrained. We introduce financial frictions into a search and matching labor market model with stochastic job matching, imperfect information, and endogenous effort. In line with the empirical literature, the model predicts that a higher minimum wage reduces hirings and separations. Firms become more selective such that their employment and wage dispersion fall. If effort increases strongly, firms may increase employment at the expense of higher wage dispersion. Financially constrained firms are more selective and reward effort less. As a result, within-firm wage dispersion and employment in these firms fall more with the minimum wage." (Author's abstract, IAB-Doku) ((en))
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Literaturhinweis
Aktuelle Entwicklungen bei der Verteilung der Arbeitseinkommen und Kompetenzen (Podium) (2023)
Bellmann, Lutz ; Dustmann, Christian ; Biewen, Martin ; Fanfani, Bernardo ; Oberfichtner, Michael ; Fitzenberger, Bernd ; Caldwell, Sydnee; Ostermann, Kerstin ; Spitz-Oener, Alexandra; Müller, Steffen ;Zitatform
Bellmann, Lutz; Christian Dustmann, Martin Biewen, Bernardo Fanfani, Michael Oberfichtner, Bernd Fitzenberger, Sydnee Caldwell, Kerstin Ostermann, Alexandra Spitz-Oener & Steffen Müller (sonst. bet. Pers.) (2023): Aktuelle Entwicklungen bei der Verteilung der Arbeitseinkommen und Kompetenzen (Podium). In: IAB-Forum H. 30.10.2023 Nürnberg. DOI:10.48720/IAB.FOO.20231030.01
Abstract
"Zu einem besseren Verständnis der Lohnfindung und Lohnverteilung sowie der beruflichen Qualifikationen beizutragen – das war das Ziel der internationalen Konferenz „Recent Developments in Wage Determination, Distribution, and Job Skills“ am IAB." (Autorenreferat, IAB-Doku)
Beteiligte aus dem IAB
Bellmann, Lutz ; Oberfichtner, Michael ; Fitzenberger, Bernd ; Ostermann, Kerstin ; Spitz-Oener, Alexandra;Ähnliche Treffer
also released in English -
Literaturhinweis
Recent Developments in the Distribution of Labour Income and Skills (2023)
Bellmann, Lutz ; Dustmann, Christian ; Biewen, Martin ; Fanfani, Bernardo ; Oberfichtner, Michael ; Fitzenberger, Bernd ; Caldwell, Sydnee; Ostermann, Kerstin ; Spitz-Oener, Alexandra; Müller, Steffen ;Zitatform
Bellmann, Lutz; Christian Dustmann, Martin Biewen, Bernardo Fanfani, Michael Oberfichtner, Bernd Fitzenberger, Sydnee Caldwell, Kerstin Ostermann, Alexandra Spitz-Oener & Steffen Müller (sonst. bet. Pers.) (2023): Recent Developments in the Distribution of Labour Income and Skills. In: IAB-Forum H. 15.12.2023 Nürnberg. DOI:10.48720/IAB.FOO.20231215.02
Abstract
"Contributing to a better understanding of wage determination and wage distribution as well as job skills – that was the aim of the international conference “Recent Developments in Wage Determination, Distribution, and Job Skills” at the IAB." (Author's abstract, IAB-Doku) ((en))
Beteiligte aus dem IAB
Bellmann, Lutz ; Oberfichtner, Michael ; Fitzenberger, Bernd ; Ostermann, Kerstin ; Spitz-Oener, Alexandra;Ähnliche Treffer
auch deutschsprachig erschienen -
Literaturhinweis
Labor economics (2023)
Zitatform
Borjas, George J. (2023): Labor economics. New York: MacGraw-Hill, 494 S.
Abstract
"Labor Economics, ninth edition by George J. Borjas provides a modern introduction to labor economics, surveying the field with an emphasis on both theory and facts. Labor Economics is thoroughly integrated with the adaptive digital tools available in McGraw-Hill’s Connect, proven to increase student engagement and success in the course. All new Data Explorer questions using data simulation to help students grasp concepts Materials are fresh and up to date by introducing and discussing the latest research studies where conceptual or empirical contributions have increased our understanding of the labor market. The book has undergone Diversity, Equity, and Inclusion reviews to implement content around topics including generalizations and stereotypes, gender, abilities/disabilities, race/ethnicity, sexual orientation, diversity of names, and age." (Author's abstract, IAB-Doku) ((en))
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Literaturhinweis
Macroeconomic Dynamics with Rigid Wage Contracts (2023)
Zitatform
Broer, Tobias, Karl Harmenberg, Per Krusell & Erik Öberg (2023): Macroeconomic Dynamics with Rigid Wage Contracts. In: The American economic review. Insights, Jg. 5, H. 1, S. 55-72. DOI:10.1257/aeri.20210672
Abstract
"We adapt the wage contracting structure in Chari (1983) to a dynamic, balanced-growth setting with recontracting as in Calvo (1983). The resulting wage-rigidity framework dampens income effects in the short run, thus allowing significant responses of hours to aggregate shocks. In reduced form, the model dynamics are similar to that in Jaimovich and Rebelo (2009), with their habit parameter replaced by our probability of wage-contract resetting. That is, if wage contracts are reset frequently, labor supply behaves in accordance with King, Plosser, and Rebelo (1988) preferences, whereas if they are never reset, we obtain the setting in Greenwood, Hercowitz, and Huffman (1988)." (Author's abstract, IAB-Doku) ((en))
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Literaturhinweis
Endogenous Labor Supply in an Estimated New-Keynesian Model: Nominal versus Real Rigidities (2023)
Cairó, Isabel ; Pfajfar, Damjan; Chung, Hess T.; Morales-Jimenez, Camilo; Ferrante, Francesco ; Fuentes-Albero, Cristina;Zitatform
Cairó, Isabel, Hess T. Chung, Francesco Ferrante, Cristina Fuentes-Albero, Camilo Morales-Jimenez & Damjan Pfajfar (2023): Endogenous Labor Supply in an Estimated New-Keynesian Model: Nominal versus Real Rigidities. (Finance and economics discussion series / Board of Governors of the Federal Reserve System 2023-069), Washington, DC, 57 S.
Abstract
"The deep deterioration in the labor market during the Great Recession, the subsequent slow recovery, and the missing disinflation are hard to reconcile for standard macroeconomic models. We develop and estimate a New-Keynesian model with financial frictions, search and matching frictions in the labor market, and endogenous intensive and extensive labor supply decisions. We conclude that the estimated combination of the low degree of nominal wage rigidities and high degree of real wage rigidities, together with the small role of pre-match costs relative to post-match costs, are key in successfully forecasting the slow recovery in unemployment and the missing disinflation in the aftermath of the Great Recession. We find that endogenous labor supply data are very informative about the relative degree of nominal and real wage rigidities and the slope of the Phillips curve. We also find that none of the model-based labor market gaps are a sufficient statistic of labor market slack, but all contain relevant information about the state of the economy summarized in a new indicator for labor market slack we put forward." (Author's abstract, IAB-Doku) ((en))
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Literaturhinweis
Staggered wages, unanticipated shocks and firms’ adjustments (2023)
Zitatform
Caloia, Francesco G., Jante Parlevliet & Mauro Mastrogiacomo (2023): Staggered wages, unanticipated shocks and firms’ adjustments. In: Journal of macroeconomics, Jg. 76. DOI:10.1016/j.jmacro.2023.103521
Abstract
"This paper empirically investigates the employment and wage effects of contract staggering, i.e., the asynchronous and infrequent way in which wages adjust to changes in the economic environment. Using an identification strategy based on exogenous start dates of collective agreements around the Great Recession, we estimate the effect of increases in base wages on firms’ labor cost adjustments. Our analysis is based on a large employers-employees dataset merged to collective agreements in the Netherlands, a country in which collective bargaining is dominant and contract staggering is relatively pervasive. The main result is that staggered wage setting has no real effect on employment. We find significant employment losses only in sectors covered by contracts with much longer durations than those normally assumed in macroeconomic models featuring staggered wages. Instead, we show that firms adjust labor costs by curbing other pay components such as bonuses and benefits and incidental pay. The overall result supports the idea that wage rigidities are not the main source of employment fluctuations." (Author's abstract, IAB-Doku, © 2023 Elsevier) ((en))
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Literaturhinweis
Sticky Wages on the Layoff Margin (2023)
Zitatform
Davis, Steven J. & Pawel M. Krolikowski (2023): Sticky Wages on the Layoff Margin. (IZA discussion paper / Forschungsinstitut zur Zukunft der Arbeit 16351), Bonn, 57 S.
Abstract
"We design and field an innovative survey of unemployment insurance (UI) recipients that yields new insights about wage stickiness on the layoff margin. Most UI recipients express a willingness to accept wage cuts of 5-10 percent to save their jobs, and one third would accept a 25 percent cut. Yet worker-employer discussions about cuts in pay, benefits or hours in lieu of layoffs are exceedingly rare. When asked why employers don't propose job-saving pay cuts, four-in-ten UI recipients don't know. Sixteen percent say cuts would undermine morale or lead the best workers to quit, and 39 percent don't think wage cuts would save their jobs. For lost union jobs, 45 percent say contractual restrictions prevent wage cuts. Among those on permanent layoff who reject our hypothetical pay cuts, half say they have better outside options, and 38 percent regard the proposed pay cut as insulting. An estimated one-quarter of the layoffs violate the condition for bilaterally efficient separations that holds in leading theories of job separations, frictional unemployment, and job ladders. We draw on our findings and other evidence to assess theories of wage stickiness and its role in layoffs." (Author's abstract, IAB-Doku) ((en))