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The Kernel-Location Approach - A New Non-parametric Approach to the Analysis of Download Nominal Rigidity in Micro Data

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  • Knoppik, Christoph

Abstract

A new econometric approach to the analysis of downward nominal wage rigidity in micro data is proposed, the kernel-location approach. It combines kernel-density estimation and the principle of joint variation of location and shape of the distribution of per cent annual nominal wage changes. The approach provides partial estimates of the counterfactual and factual distributions, of the rigidity function and of the degree of downward nominal wage rigidity. It avoids problematic assumptions of other semi- or non-parametric approaches to downward nominal wage rigidity in micro data and allows a discussion of the type of downward nominal wage rigidity encountered in data. Der vorliegende Beitrag stellt einen neuen ökonometrischen Ansatz zur Analyse der Abwärtsnominallohnstarrheit in Mikrodaten vor, den sogenannten Kernel-Location-Approach. Dieser kombiniert die Schätzung der Kernel-Dichte und das Prinzip der verbundenen Variation von Lage sowie Form der Verteilung von prozentualen jährlichen Nominallohnänderungen. Der Ansatz liefert Teilschätzungen der kontrafaktischen und der faktischen Verteilungen, der Starrheitsfunktion und des Grades der Abwärtsnominallohnstarrheit. Er vermeidet problematische Annahmen anderer semi- oder nicht-parametrischer Ansätze zur Abwärtsnominallohnstarrheit in Mikrodaten und ermöglicht die Diskussion verschiedener Arten der in Daten anzutreffenden Abwärtsnominallohnstarrheit.

Suggested Citation

  • Knoppik, Christoph, 2004. "The Kernel-Location Approach - A New Non-parametric Approach to the Analysis of Download Nominal Rigidity in Micro Data," University of Regensburg Working Papers in Business, Economics and Management Information Systems 392, University of Regensburg, Department of Economics.
  • Handle: RePEc:bay:rdwiwi:662
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    File URL: https://epub.uni-regensburg.de/4527/1/kno03kernel.pdf
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    References listed on IDEAS

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    1. David Card & Dean Hyslop, 1997. "Does Inflation "Grease the Wheels of the Labor Market"?," NBER Chapters,in: Reducing Inflation: Motivation and Strategy, pages 71-122 National Bureau of Economic Research, Inc.
    2. Christina D. Romer & David H. Romer, 1997. "Reducing Inflation: Motivation and Strategy," NBER Books, National Bureau of Economic Research, Inc, number rome97-1, January.
    3. Hardle, Wolfgang & Linton, Oliver, 1986. "Applied nonparametric methods," Handbook of Econometrics,in: R. F. Engle & D. McFadden (ed.), Handbook of Econometrics, edition 1, volume 4, chapter 38, pages 2295-2339 Elsevier.
    4. Christoph Knoppik & Thomas Beissinger, 2003. "How Rigid are Nominal Wages? Evidence and Implications for Germany," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(4), pages 619-641, December.
    5. Thomas Beissinger & Christoph Knoppik, 2001. "Downward Nominal Rigidity in West German Earnings, 1975-95," German Economic Review, Verein für Socialpolitik, vol. 2(4), pages 385-417, November.
    6. McLaughlin, Kenneth J., 1994. "Rigid wages?," Journal of Monetary Economics, Elsevier, vol. 34(3), pages 383-414, December.
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    More about this item

    Keywords

    Nichtparametrisches Verfahren ; Lohnstarrheit ; Personenbezogene Daten; ; Downward Nominal Wage Rigidity ; Kernel-Location Approach ; Micro Data;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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