Downward nominal wage rigidity in Poland

Abstract

We use data on enterprise level from a survey of medium sized and big companies to test for downward nominal wage rigidity in Poland. We find relatively weak support for downward nominal wage rigidity when average total compensation in the enterprise is taken into account. However, since this result may be affected by job rotation,we propose a method for eliminating its impact and find that downward wage rigidity becomes higher. Moreover, disaggregating the data reveals strong differences between sectors, with no rigidity in highly competitive branches and significant rigidities in monopolized or stateowned sectors. Still, the amount of downward nominal wage rigidity seems lower than in other countries, although, due to differences in data sets, robust comparisons are not possible.downward nominal wage rigidity, Poland, inflation