[工程科技]Abstract Downward Nominal Wage Rigidity Evidence from the Employment Cost Index.pdfVIP

Downward Nominal Wage Rigidity: Evidence from the Employment Cost Index by David E. Lebow, Raven E. Saks, and Beth Anne Wilson Board of Governors of the Federal Reserve System July, 1999 Abstract: We examine the extent of downward nominal wage rigidity using the microdata underlying the BLS’s employment cost index--an extensive, establishment-based dataset with detailed information on wage and benefit costs. We find stronger evidence of downward nominal wage rigidity than did previous studies using panel data on individuals. Firms appear able to circumvent part, but not all, of this rigidity by varying benefits: Total compensation displays modestly less rigidity than do wages alone. Given our estimated amount of rigidity, a simple model predicts that the disinflation over the 1980s should have raised equilibrium unemployment notably. This prediction stands in contrast to the actual behavior of unemployment over this period: The addition of a term capturing the cost of rigidity (that rises as inflation falls) has no additional explanatory power in a standard Phillips Curve equation. We would like to thank the Bureau of Labor Statistics for allowing the use of these data and John Ruser and Mike Lettau of the BLS for providing extensive assistance with this project. We also thank our colleagues at the Federal Reserve and participants at a BLS seminar for their comments and suggestions, and Shulamit Kahn for providing guidance in programming the econometric tests. The analysis and conclusions set forth are those of the authors and do not indicate concurrence by other members of the staff, by the Board of Governors, or by the Federal Reserve Banks. 1. Introduction Workers may resist pay cuts for many reasons, most obviously because cuts lead to a lower standard of living, but also because they ma