Code and Public Data for "Aggregate Nominal Wage Adjustments: New Evidence from Administrative Payroll Data"

Principal Investigator(s): View help for Principal Investigator(s) John Grigsby, Northwestern University; Erik Hurst, University of Chicago Booth School of Business; Ahu Yildirmaz, ADP, LLC

Version: View help for Version V1

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Replication			08/17/2020 04:09:PM
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Project Citation:

Grigsby, John, Hurst, Erik, and Yildirmaz, Ahu. Code and Public Data for “Aggregate Nominal Wage Adjustments: New Evidence from Administrative Payroll Data.” Nashville, TN: American Economic Association [publisher], 2021. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2021-01-28. https://doi.org/10.3886/E120647V1

Project Description

Summary: Using administrative payroll data from the largest U.S. payroll processing company, we measure the extent of nominal wage rigidity in the United States. The data allow us to define a worker's per-period base contract wage separately from other forms of compensation such as overtime premiums and bonuses. We provide evidence that firms use base wages to cyclically adjust the marginal cost of their workers. Nominal base wage declines are much rarer than previously thought with only 2% of job-stayers receiving a nominal base wage cut during a given year. Approximately 35% of workers receive no base wage change year over year. We document strong evidence of both time and state dependence in nominal base wage adjustments. In addition, we provide evidence that the flexibility of new hire base wages is similar to that of existing workers. Collectively, our results can be used to discipline models of nominal wage rigidity.

Scope of Project

JEL Classification:
      E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
      J30 Wages, Compensation, and Labor Costs: General
      J33 Compensation Packages; Payment Methods

Geographic Coverage: United States

Time Period(s): 5/2008 – 12/2016

Data Type(s): program source code; survey data

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Published Versions

V1 [2021-01-28]

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DDI 2.5

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