We test whether firms react to changes in the wages and size of their competitors. We use a unique institutional … size and wages of the firm receiving the shock. Then, we document that these firm-specific demand shocks lead to increased … wages of other (competing) firms in the same local labor market. We do not find negative effects on competitors' firm size …

why firms lay off workers instead of cutting wages. Our questions on layoffs, wage cuts, and the link between them provide …. Employers are hesitant to cut wages in many instances because they see wage cuts as a poor substitute for layoffs. First, firms … report that lowering wages triggers costs through the impact on morale and quits. Comparing these costs with potential …

economic conditions at the time of hiring on future wages. Measured by the labor's user cost, the price of labor is …