Aggregate Nominal Wage Adjustments: New Evidence from Administrative Payroll Data

Using administrative payroll data from the largest US processing company, we measure extent of nominal wage rigidity in United States. The allow us to define a worker’s per-period base contract separately other forms compensation such as overtime premiums and bonuses. We provide evidence that firms use wages cyclically adjust marginal cost their workers. Nominal declines are much rarer than previously thought with only 2 percent job-stayers receiving cut during given year. Approximately 35 workers receive no change year over document strong both time state dependence adjustments. In addition, flexibility new hire is similar existing Collectively, our results can be used discipline models rigidity. (JEL E24, E32, J31, J41)