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Skewness and Location of Distributions of Wage Change Rates in the Presence of Downward Nominal Wage Rigidity

Christoph Knoppik ()

No 420, University of Regensburg Working Papers in Business, Economics and Management Information Systems from University of Regensburg, Department of Economics

Abstract: The skewness-location approach to the analysis of downward nominal wage rigidity in micro data judges the existence of rigidity on the basis of estimated functional relationships between measures of location and of skewness of the distributions of individual rates of wage change in different years. Here it is shown that the properties of theoretical skewness-location relationships can deviate from those asserted by the skewness-location approach thus invalidating its test logic. Consequently, judgment based on the skewness-location approach is biased away from finding evidence for rigidity. Der Skewness-Location Ansatz zur Analyse von Abwärtsnominallohnstarrheit in Mikrodaten beurteilt das Vorliegen von Starrheit anhand geschätzter funktionaler Beziehungen zwischen Lage- und Schiefemaßen der Verteilungen von individuellen Lohnänderungsraten in verschiedenen Jahren. Hier wird gezeigt, dass die Eigenschaften theoretischer Skewness-Location Beziehungen von den im Skewness-Location Ansatz behaupteten abweichen können und so dessen zugrundeliegende Testlogik aushebeln. Die Wahrscheinlichkeit mit dem Skewness-Location Ansatz Abwärtsnominallohnstarrheit zu finden ist daher nach unten verzerrt.

Keywords: Lohnstarrheit; Preisstarrheit; Nominallohn; Schiefe Wahrscheinlichkeitsverteilung; Nominal wage rigidity; skewness; skewness-location approach; nominal price rigidity; downward nominal wage rigidity (search for similar items in EconPapers)
JEL-codes: E24 J30 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-mac
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