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Looking Inside the Labor Market: A Review Article

Peter Howitt

Brown University. For helpful comments and suggestions I would like to thank, without implicating, Daron Acemoglu, George Akerlof, Ernst Fehr, Pierre Fortin, David Laidler, John McMillan, Ignacio Palacios-Huerta, and David Weil.

Journal of Economic Literature 2002

When unemployed workers are available, why don't firms cut wages until the excess supply is eliminated? In his book, Why Wages Don't Fall During a Recession, Truman F. Bewley concludes, based on interviews with managers and labor leaders, that the most important factor inhibiting wage cuts is the psychological factor of morale. Bewley's field research has made an outstanding contribution to our knowledge of labor markets, by providing a close-up view of exactly what happens from the vantage point of the participants.

DOI
10.1257/0022051026994
Volume
40 (1)
Pages
125-138
Language
en
Export
BibTeX
Sources
crossref openalex