Properties of the Histogram Location Approach and the Extent and Change of Downward Nominal Wage Rigidity in the EU
The histogram location approach has been proposed by Kahn (1997) to estimate the fraction of wage cuts prevented by downward nominal wage rigidity. In this paper, we analyze the validity of the approach by means of a simulation study which yielded evidence of unbiasedness but also of potential underestimation of rigidity parameter uncertainty and therefore of potential anticonservative inference. We apply the histogram location approach to estimate the extent of downward nominal wage rigidity across the EU for 1995-2001. Our data base is the User Data Base (UDB) of the European Community Household Panel (ECHP). The results show wide variation in the fraction of wage cuts prevented by nominal wage rigidity across the EU. The lowest rigidity parameters are found for the UK, Spain and Ireland, the largest for Portugal and Italy. Analyzing the change of rigidity between sub periods 1995-1997 and 1999-2001 even shows an widening of the differences in nominal wage rigidity. Due to the finding of large differences across the EU, the results imply that the costs of low inflation policies across the EU differ substantially.
Downward Nominal Wage Rigidity and Gender
We test whether there are gender differences in downward rigidity, using Kahn's histogram‐location method and longitudinal registry data on all formally employed persons from the Estonian Tax and Customs Board. The results show that women resist pay cuts less than men. Also, in circumstances of increasing unemployment women's opposition to pay cuts decreases substantially, whereas men's attitudes towards pay cuts are not significantly affected by labour market conditions.
Did the metamorphosis from Export Processing Zones to Special Economic Zones improve the efficiency of trade enclaves in India?
In this paper, the efficiency of seven conventional Special Economic Zones in India is analyzed, by adopting a stochastic production frontier technique, for the period between 1986–1987 and 2007–2008.Results indicate that although the efficiency scores of these enclaves have improved over the years, specifically with the introduction of the SEZ policy (2000–2001), it is far below the threshold level as identified in the literature. Besides, one can also observe a discrepancy emerging between better export earning zones and efficient zones. On the determinants side, policy intervention and large geographical area, accompanied by clustering of units, are found to have impacted the efficiency scores of these enclaves positively.