Abstract :
Weexploretheexistenceofdownwardrealwagerigidity(DRWR)attheindustrylevel,
basedondatafrom19OECDcountriesfortheperiod1973–1999.Theresultsshowthat
DRWRcompressesthedistributionsofindustrywagechangesoverall,aswellasfor
specificgeographicalregionsandtimeperiods,buttherearenotmanyrealwagecuts
that areprevented.Moreimportant,however,DRWRattenuateslargerrealwagecuts,
thus leadingtohigherrealwages.Thereisstrongerevidencefordownwardnominal
wagerigiditythanforDRWR.Realwagecutsarelessprevalentincountrieswithstrict
employment protectionlegislationandhighuniondensity
