Downward Nominal Rigidity in US Wage Data from the PSID - An Application of the Kernel-Location Approach

Christoph Knoppik

No 393, University of Regensburg Working Papers in Business, Economics and Management Information Systems from University of Regensburg, Department of Economics

Abstract: Earlier studies of US wage data from the PSID with a variety of methods have led to mixed results with respect to the existence and extent of downward nominal wage rigidity. Here the kernellocation approach to the analysis of downward nominal wage rigidity in micro data is applied to that data for the first time, in order to non-parametrically estimate counterfactual and factual distributions of annual nominal wage changes, the rigidity function and the average degree of downward nominal wage rigidity. Avoiding several problems of earlier studies by the use of the kernellocation approach, a substantial degree of downward nominal wage rigidity is found, and earlier evidence in favor of the hypothesis of downwardly rigid nominal wages is corroborated, weakening the institutionalist view of downward nominal wage rigidity. Frühere Untersuchungen zu US-amerikanischen Lohndaten der PSID unter Verwendung unterschiedlicher Methoden haben recht verschiedene Ergebnisse bzgl. der Existenz und des Ausmaßes von Abwärtsnominallohnstarrheit gezeitigt. In diesem Beitrag wird zum ersten Mal der Kernel-Location-Approach zur Analyse der Abwärtsnominallohnstarrheit in Mikrodaten verwandt. Mit ihm wird eine nicht-parametrische Schätzung der kontrafaktischen und der faktischen Verteilungen, der Starrheitsfunktion und des durchschnittlichen Grades der Abwärtsnominallohnstarrheit durchgeführt. Die Vermeidung vieler Probleme früherer Studien durch die Anwendung des Kernel-Location-Approach ermöglicht den Nachweis eines erheblichen Grades an Abwärtsnominallohnstarrheit. Dadurch können frühere, die Hypothese abwärtsstarrer Nominallöhne stützende, Ergebnisse untermauert werden, wobei gleichzeitig die institutionalistische Position zur Abwärtsnominallohnstarrheit geschwächt wird.

Keywords: USA; Lohn; Lohnstarrheit; Nichtparametrisches Verfahren; USA; PSID; Wage; Downward Nominal Wage Rigidity; Kernel-location approach (search for similar items in EconPapers)
JEL-codes: E24 J30 (search for similar items in EconPapers)
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://epub.uni-regensburg.de/4526/1/kno03kernel_psid.pdf (application/pdf)

Related works:
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:bay:rdwiwi:663

Access Statistics for this paper

More papers in University of Regensburg Working Papers in Business, Economics and Management Information Systems from University of Regensburg, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Gernot Deinzer (gernot.deinzer@bibliothek.uni-regensburg.de).