scholarly journals Aggregate Nominal Wage Adjustments: New Evidence from Administrative Payroll Data

2021 ◽  
Vol 111 (2) ◽  
pp. 428-471
Author(s):  
John Grigsby ◽  
Erik Hurst ◽  
Ahu Yildirmaz
Keyword(s):  
United States ◽  
Marginal Cost ◽  
State Dependence ◽  
The United States ◽  
Wage Rigidity ◽  
Nominal Wage ◽  
Wage Change ◽  
Nominal Wage Rigidity ◽  
New Evidence ◽  
New Hire

Using administrative payroll data from the largest US payroll processing company, we measure the extent of nominal wage rigidity in the United States. The data allow us to define a worker’s per-period base contract wage separately from other forms of compensation such as overtime premiums and bonuses. We provide evidence that firms use base wages to cyclically adjust the marginal cost of their workers. Nominal base wage declines are much rarer than previously thought with only 2 percent of job-stayers receiving a nominal base wage cut during a given year. Approximately 35 percent of workers receive no base wage change year over year. We document strong evidence of both time and state dependence in nominal base wage adjustments. In addition, we provide evidence that the flexibility of new hire base wages is similar to that of existing workers. Collectively, our results can be used to discipline models of nominal wage rigidity. (JEL E24, E32, J31, J41)

scholarly journals Downward Nominal Wage Rigidity in the United States During and After the Great Recession

2020 ◽  
Vol 2020 (001r1) ◽  
Author(s):  
◽  
Bruce Fallick ◽  
Daniel Villar ◽  
William L. Wascher ◽  
◽  
...  
Keyword(s):  
United States ◽  
Great Recession ◽  
The United States ◽  
Wage Rigidity ◽  
Nominal Wage ◽  
The Great Recession ◽  
Nominal Wage Rigidity

Union Wage Determination in Canadian and U.S. Manufacturing, 1964–1990: A Comparative Analysis

ILR Review ◽  
1996 ◽  
Vol 49 (4) ◽  
pp. 673-689
Author(s):  
John W. Budd
Keyword(s):  
United States ◽  
Real Wage ◽  
Union Wage ◽  
The United States ◽  
Manufacturing Firms ◽  
Wage Bargaining ◽  
Wage Determination ◽  
Nominal Wage ◽  
Real Wages ◽  
Wage Change

The author analyzes nominal and real wage changes in unionized manufacturing firms in Canada and the United States over the years 1964–90. He finds more differences between the countries' patterns of wage determination in the years 1964–79 than have commonly been recognized. In the 1980s, the nominal wage determination structure changed more sharply in the United States than in Canada. Real wage determination changed little in the United States before 1986, while after 1986 observed real wage growth was significantly smaller than what would have been predicted based on patterns of bargaining in earlier years. In Canada, real wages in the 1980s were significantly higher than they would have been if the previous patterns of wage determination had persisted. Both the nominal and real wage change results suggest that unions in U.S. manufacturing fared poorly in wage bargaining in the 1980s by comparison with their Canadian counterparts.

scholarly journals Downward Wage Rigidity in Europe: A New Flexible Parametric Approach and Empirical Results

2010 ◽  
Vol 11 (2) ◽  
pp. 169-187 ◽  
Author(s):  
Andreas Behr ◽  
Ulrich Pötter
Keyword(s):  
European Community ◽  
Wage Rigidity ◽  
Price Stability ◽  
Nominal Wage ◽  
Parametric Approach ◽  
Generalized Hyperbolic Distribution ◽  
Wage Change ◽  
Hyperbolic Distribution ◽  
User Data ◽  
Nominal Wage Rigidity

Abstract We suggest a new parametric approach to estimate the extent of downward nominal wage rigidity in ten European countries between 1995 and 2001. The database used throughout is the User Data Base of the European Community Household Panel (ECHP). The proposed approach is based on the generalized hyperbolic distribution, which allows to model wage change distributions characterized by thick tales, skewness and leptokurtosis. Significant downward nominal wage rigidity is found in all countries under analysis, but the extent varies considerably across countries. Yearly estimates reveal increasing rigidity in Italy, Greece and Portugal, while rigidity is declining in Denmark and Belgium. The results imply that the costs of price stability differ substantially across Europe.

Lending to the Borrower from Hell

2017 ◽  
Author(s):  
Mauricio Drelichman ◽  
Hans-Joachim Voth
Keyword(s):  
United States ◽  
Sixteenth Century ◽  
Sovereign Debt ◽  
Risk Sharing ◽  
The United States ◽  
Philip Ii ◽  
Loan Contracts ◽  
The Right ◽  
Intelligent Model ◽  
New Evidence

Why do lenders time and again loan money to sovereign borrowers who promptly go bankrupt? When can this type of lending work? As the United States and many European nations struggle with mountains of debt, historical precedents can offer valuable insights. This book looks at one famous case—the debts and defaults of Philip II of Spain. Ruling over one of the largest and most powerful empires in history, King Philip defaulted four times. Yet he never lost access to capital markets and could borrow again within a year or two of each default. Exploring the shrewd reasoning of the lenders who continued to offer money, the book analyzes the lessons from this historical example. Using detailed new evidence collected from sixteenth-century archives, the book examines the incentives and returns of lenders. It provides powerful evidence that in the right situations, lenders not only survive despite defaults—they thrive. It also demonstrates that debt markets cope well, despite massive fluctuations in expenditure and revenue, when lending functions like insurance. The book unearths unique sixteenth-century loan contracts that offered highly effective risk sharing between the king and his lenders, with payment obligations reduced in bad times. A fascinating story of finance and empire, this book offers an intelligent model for keeping economies safe in times of sovereign debt crises and defaults.

The Firm, Wage Indexation, and Nominal Wage Rigidity

2016 ◽  
Author(s):  
James M. Holmes ◽  
John M. Holmes ◽  
Patricia A. Hutton
Keyword(s):  
Wage Rigidity ◽  
Nominal Wage ◽  
Wage Indexation ◽  
Nominal Wage Rigidity
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