Click here for search results
Wage rigidity and disinflation in emerging countries, Volume 1
 
Author:Messina, Julian; Sanz-de-Galdeano, Anna; Country:Brazil; Uruguay;
Date Stored:2011/10/31Document Date:2011/10/01
Document Type:Policy Research Working PaperSubTopics:Environmental Economics & Policies; Income; Economic Theory & Research; Labor Markets; Labor Policies
Language:EnglishRegion:Latin America & Caribbean
Report Number:WPS5863Collection Title:Policy Research working paper ; no. WPS 5863
Volume No:1  

Summary: This paper examines the consequences of rapid disinflation for downward wage rigidities in two emerging countries, Brazil and Uruguay, relying on high quality matched employer-employee administrative data. Downward nominal wage rigidities are more important in Uruguay, while wage indexation is dominant in Brazil. Two regime changes are observed during the sample period, 1995-2004: (i) in Uruguay wage indexation declines, while workers' resistance to nominal wage cuts becomes more pronounced; and (ii) in Brazil, the introduction of inflation targeting by the Central Bank in 1999 shifts the focal point of wage negotiations from changes in the minimum wage to expected inflation. These regime changes cast doubts on the notion that wage rigidity is structural in the sense of Lucas (1976).

Official Documents
Official, scanned versions of documents (may include signatures, etc.)
File TypeDescriptionFile Size (mb)
PDF 43 pagesOfficial version*3.01 (approx.)
TextText version**
How To Order

* The official version is derived from scanning the final, paper copy of the document and is the official,
archived version including all signatures, charts, etc.
** The text version is the OCR text of the final scanned version and is not an accurate representation of the final text.
It is provided solely to benefit users with slow connectivity.



Permanent URL for this page: http://go.worldbank.org/8KASHWMSW0