In employment relationships, a wage is an installment payment on an implicit long-term agreement between a worker and a firm. The price of labor that impacts firm's hiring decisions, instead, reflects the hiring wage as well as the impact of economic conditions at the time of hiring on future...

Using data from the Panel Study of Income Dynamics, the author examines the cyclicality of wages within employer-employee matches for the years 1970-91. Recent research on wage cyclicality has suggested that wages are very procyclical (tending to rise and fall with economic upturns and...

This paper contains the first cross-country comparison of the cyclical behaviour of real wages using microdata. After controlling for changes in labour quality, I find that real wages are strongly procyclical in Canada, the United Kingdom, and the United States. In contrast, the cyclicality of...

I present a model in which efficiency wages generate acyclical real wages but do not lower the sensitivity of marginal cost to output or increase price stickiness. Consideration of previous models suggests that efficiency wages are a poor real rigidity

Modern monetary business-cycle models rely heavily on price and wage rigidity. While there is substantial evidence that prices do not adjust frequently, there is much less evidence on whether wage rigidity is an important feature of real world labor markets. While real average hourly earnings...

We develop a new measure of wage rigidity, the Nash wage elasticity (NWE). The NWE is the percentage change in the actual wage rate when the wage that would occur under Nash bargaining changes by 1%. We show that the NWE can be measured from aggregate data under relatively weak assumptions which...

Firms hire workers from different pools. Some firms hire more unemployed workers than others, making their demand for labor more important for unemployment. I differentiate jobs based on their hiring pool and estimate their wage cyclicality. The key finding is that wages in jobs hiring from...