Code for: "Wage Rigidity and Employment Outcomes: Evidence from Administrative Data"

Principal Investigator(s):  View help for Principal Investigator(s) Gabriel Ehrlich, University of Michigan; Joshua Montes, Board of Governors of the Federal Reserve System

Version:  View help for Version V1

Name File Type Size Last Modified
18_19_WR_Graphs_BinScatter.xlsx application/vnd.openxmlformats-officedocument.spreadsheetml.sheet 30.2 KB 10/26/2022 04:17:PM
Matlab_MFile_List.xlsx application/vnd.openxmlformats-officedocument.spreadsheetml.sheet 11.5 KB 08/09/2022 05:09:AM
aggregate_histograms221016.m text/x-objcsrc 4.3 KB 09/04/2013 03:54:PM
aggregate_histograms_data130904.mat application/x-matlab-data 3.6 KB 10/26/2022 04:32:PM
arctan_graph_for_ref_report_210616.m text/x-objcsrc 946 bytes 10/21/2022 11:13:AM
basemodel_AEJ_211229.m text/x-matlab 57.4 KB 10/21/2022 09:47:AM
calibratedparams.mat application/x-matlab-data 431 bytes 10/21/2022 10:16:AM
densities1976to2008.mat application/x-matlab-data 12 KB 05/14/2022 05:05:AM
epan2.m text/x-matlab 2 KB 10/19/2013 06:14:PM
estimatemodel220724.m text/x-matlab 14 KB 01/09/2018 08:14:AM

Project Description

Summary:  View help for Summary This paper examines the relationship between downward nominal wage rigidity and employment outcomes using linked employer-employee data. Wage rigidity prevents 27.1 percent of counterfactual wage cuts, with a standard deviation of 19.2 percent across establishments. An establishment with the sample-average level of wage rigidity is predicted to have a 3.3 percentage point higher layoff rate, a 7.4 percentage point lower quit rate, and a 2.0 percentage point lower hire rate. Estimating a structural model by indirect inference implies that the cost of a nominal wage cut is 33 percent of an average worker’s annual compensation.

Scope of Project

JEL Classification:  View help for JEL Classification
      E20 Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy: General (includes Measurement and Data)
      E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
      J23 Labor Demand
      J31 Wage Level and Structure; Wage Differentials
      J63 Labor Turnover; Vacancies; Layoffs


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Published Versions

V1 [2023-12-15]

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