Wages are "sticky" if employers are slow to adjust them in response to changing economic conditions. In Some Evidence on the Importance of Sticky Wages (NBER Working Paper No. 16130), co-authors Alessandro Barattieri, Susanto Basu, and Peter Gottschalk analyze data on U.S. wages, employment, and demographic characteristics for the period 1996-9 from the Survey of Income and Program Participation. The authors find that in the average three-month period, the probability of a nominal wage change is 18 percent for workers who are paid by the hour. For salaried workers, the probability drops to 5 percent.
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