Some Evidence on the Importance of Sticky Wages
- (pp. 70-101)
Abstract
We present evidence on the frequency of nominal wage adjustment using SIPP data adjusted for measurement error. The SIPP is a representative sample of the US population. Our main results are: (i) The average quarterly probability of a nominal wage change is between 21.1 and 26.6 percent, depending on the assumptions used. (ii) Wage changes are much more likely when workers change jobs. (iii) The frequency of wage adjustment does not display significant seasonal patterns. (iv) The hazard of a nominal wage change first increases and then decreases, with a peak at 12 months.Citation
Barattieri, Alessandro, Susanto Basu, and Peter Gottschalk. 2014. "Some Evidence on the Importance of Sticky Wages." American Economic Journal: Macroeconomics, 6 (1): 70-101. DOI: 10.1257/mac.6.1.70Additional Materials
JEL Classification
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
- E32 Business Fluctuations; Cycles
- E52 Monetary Policy
- J31 Wage Level and Structure; Wage Differentials
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