Babecky, JanDu Caju, PhilipKosma, TheodoraLawless, MartinaMessina, JulianRoom, Tairi2014-09-022014-09-022009-12https://hdl.handle.net/10986/19954Firms have multiple options at the time of adjusting their wage bills. However, previous literature has mainly focused on base wages. This paper broadens the analysis beyond downward rigidity in base wages by investigating the use of other margins of labor cost adjustment at the firm level. Using data from a unique survey, the authors find that firms make frequent use of other, more flexible, components of compensation to adjust the cost of labor. Changes in bonuses and non-pay benefits are some of the potential margins firms use to reduce costs. The paper also shows how the margins of adjustment chosen are affected by firm and worker characteristics.en-USCC BY 3.0 IGOAFFECTED WORKERSBRANCHESCENTRAL BANKCENTRAL BANKSCOLLECTIVE AGREEMENTSCOLLECTIVE BARGAININGCOMPANYCOMPETITIVE PRESSURESCOMPETITORDIFFERENTIATED IMPACTEARLY RETIREMENTEARNINGECONOMETRIC ANALYSISECONOMIC ACTIVITYECONOMIC SHOCKSEMPLOYEEEMPLOYMENTENVIRONMENTSEXOGENOUS SHOCKSEXPORTSFIRM LEVELFIRM SIZEFIRM SURVEYFIRMSHIGH WAGEHUMAN RESOURCESINDEXATIONINFLATIONINTERNATIONAL MARKETSLABOR COSTLABOR COSTSLABOR DEMANDLABOR ECONOMICSLABOR MARKETSLABOURLABOUR COSTLABOUR COSTSLABOUR FORCELABOUR MARKETLABOUR MARKET INSTITUTIONSLABOUR MARKETSLABOUR RELATIONSLABOUR TURNOVERMACROECONOMIC PERFORMANCEMACROECONOMICSMARGINAL COSTSMENU COSTSMONETARY POLICYMOTIVATIONNOMINAL WAGESNON-WAGE COSTPERMANENT WORKERSPOLITICAL ECONOMYPREVIOUS SECTIONPRICE CHANGESPROBIT REGRESSIONSPRODUCT MARKETPRODUCT MARKET COMPETITIONREAL WAGEREAL WAGESRETIREMENTSTICKY PRICESTEMPORARY WORKERSTOTAL COSTSTOTAL WAGEUNEMPLOYMENTUNION ACTIVITYWAGE ADJUSTMENTWAGE BARGAININGWAGE BILLWAGE FLEXIBILITYWAGE LEVELWAGE NEGOTIATIONSWAGE RIGIDITIESWAGE RIGIDITYWAGE STRUCTUREWHITE COLLAR WORKERSWORK ORGANISATIONWORKERWORKERSYOUNGER WORKERS10.1596/1813-9450-5160