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[size=1.75em]Another possible source of wage stickiness
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Robert M. Solow

[size=1em][size=1em]Massachusetts Institute of Technology, USA


[size=1em]Received 10 June 1977.  
[size=1em]Available online 25 August 2004.



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AbstractA number of hypotheses have been advanced to explain wage stickiness. This article explores another reason why wage stickiness might be in an employer's interest: the relationship between productivity and the wage rate. If the wage enters the short-run production function, a cost-minimizing firm will leave its wage offer unchanged, no matter how its output varies, if and only if the wage enters the production function in a labor-augmenting way.


[size=1em]Article Outline


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