Sticky wages: evidence from quarterly microeconomic data

Thomas Heckel, Hervé Le Bihan and Jérémi Montornes

No 893, Working Paper Series from European Central Bank

Abstract: This paper documents nominal wage stickiness using an original quarterly firm-level dataset. We use the ACEMO survey, which reports the base wage for up to 12 employee categories in French firms over the period 1998 to 2005, and obtain the following main results. First, the quarterly frequency of wage change is around 35 percent. Second, there is some downward rigidity in the base wage. Third, wage changes are mainly synchronized within firms but to a large extent staggered across firms. Fourth, standard Calvo or Taylor schemes fail to match micro wage adjustment patterns, but fixed duration "Taylor-like" wage contracts are observed for a minority of firms. Based on a two-thresholds sample selection model, we perform an econometric analysis of wage changes. Our results suggest that the timing of wage adjustments is not state-dependent, and are consistent with existence of predetermined of wage changes. They also suggest that both backward- and forward-looking behaviour is relevant in wage setting. JEL Classification: E24, J3

Keywords: wage predetermination; wage stickiness (search for similar items in EconPapers)
Date: 2008-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

Downloads: (external link)
https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp893.pdf (application/pdf)

Related works:
Journal Article: Sticky Wages: Evidence from Quarterly Microeconomic Data (2012)
Working Paper: Sticky Wages. Evidence from Quarterly Microeconomic Data (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:2008893

Access Statistics for this paper

More papers in Working Paper Series from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().