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Skewness and location of distributions of wage change rates in the presence of downward nominal wage rigidity

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Author Info
Knoppik, Christoph

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Abstract

The skewness-location approach to the analysis of downward nominal wage rigidity in micro data judges the existence of rigidity on the basis of estimated functional relationships between measures of location and of skewness of the distributions of individual rates of wage change in different years. Here it is shown that the properties of theoretical skewness-location relationships can deviate from those asserted by the skewness-location approach thus invalidating its test logic. Consequently, judgment based on the skewness-location approach is biased away from finding evidence for rigidity.

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Paper provided by University of Regensburg, Department of Economics in its series Regensburger Diskussionsbeiträge zur Wirtschaftswissenschaft with number 420.

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Date of creation: 26 Feb 2007
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Handle: RePEc:bay:rdwiwi:763

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Related research
Keywords: Nominal wage rigidity; skewness; skewness-location approach; nominal price rigidity; downward nominal wage rigidity; Lohnstarrheit; Preisstarrheit; Nominallohn; Schiefe Wahrscheinlichkeitsverteilung;

Find related papers by JEL classification:
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Thomas Beissinger & Christoph Knoppik, 2001. "Downward Nominal Rigidity in West German Earnings, 1975-95," German Economic Review, Blackwell Publishing, vol. 2(4), pages 385-417, November. [Downloadable!] (restricted)
  2. repec:bep:macadv:v:3:y:2003:i:1:p:1117-1117 is not listed on IDEAS
  3. McLaughlin, Kenneth J., 1994. "Rigid wages?," Journal of Monetary Economics, Elsevier, vol. 34(3), pages 383-414, December. [Downloadable!] (restricted)
  4. Michael F. Bryan & Stephen G. Cecchetti, 1999. "Inflation And The Distribution Of Price Changes," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 188-196, May. [Downloadable!] (restricted)
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  5. David Genesove, 2003. "The Nominal Rigidity of Apartment Rents," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 844-853, 09. [Downloadable!] (restricted)
    Other versions:
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