scholarly journals Downward Nominal Wage Rigidity in the United States during and after the Great Recession

2020 ◽  
Author(s):  
Bruce Fallick ◽  
Daniel Villar Vallenas ◽  
William Wascher
Keyword(s):  
United States ◽  
Great Recession ◽  
The United States ◽  
Wage Rigidity ◽  
Nominal Wage ◽  
The Great Recession ◽  
Nominal Wage Rigidity

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

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)

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