Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/246301 
Year of Publication: 
2020
Series/Report no.: 
Working Paper No. 2011
Version Description: 
This version: June 2020
Publisher: 
Johannes Kepler University of Linz, Department of Economics, Linz
Abstract: 
We use representative payroll data from Great Britain to document novel facts about nominal wage adjustments, focusing on workers who stayed in the same firm and job from one year to the next. The richness of these data allows us to analyse basic pay and the other components of earnings, such as overtime and incentive pay, while accounting for hours worked. Weekly and hourly basic pay show signs of downward nominal rigidity, but non-basic pay components adjust more commonly. Unusually, these payroll-based data also report the wage rates of hourly-paid employees. A quarter of these workers typically see no change in their wage rates from one year to the next in the same job, and very few experience wage cuts. We exploit the employer-employee link in the data and find evidence of state-dependent pay setting, depending on the business cycle and whether firms are shrinking or expanding. Finally, we show that the basic and non-basic wages of new hires and existing employees are similarly flexible.
Subjects: 
downward nominal wage rigidity
components of pay
hourly pay rates
hiring wages
allocative wages
JEL: 
E24
E32
J31
J33
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.