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Management Toolkit

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Firms’ Wage Adjustments: a Break from the Past?

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Publisher Federal Reserve Bank of St. Louis
Publisher Registration Direct access to download
Topics HR Date added 01 May 1999
Downloads 3 Format 811.3KB PDF, requires Acrobat Rdr 5

The paper proceeds as follows. First we describe the wage-setting process in large firms and discuss the reasons why wage change distributions may not be neutral with respect to inflation. Then we describe the data. The fourth section describes our main results on the distributional effects of inflation. To test for robustness, we also consider the impact of unemployment and changes in returns to education on wage-change distributions. The fifth section investigates two policy-relevant questions: whether some jobs tend to be the first to respond to changes in inflation, and whether wage changes in the 1990s have deviated from historical patterns. The sixth section summarizes and concludes.

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