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Table 7 Wage regression

From: Why do wages become more rigid during a recession than during a boom?

 

(1)

(2)

(3)

(4)

(5)

(6)

(7)

Dependent variable:

Regular pay

Bonus pay

 

OLS

FE

OLS

FE

Proxy of p:

CPI

Output

CPI

Output

p/100

-0.792

0.503

1.806

0.560

-2.349

0.515

1.593

 

(0.303)

(0.115)

(0.207)

(0.253)

(0.494)

(0.244)

(0.581)

Non-union

-0.573

0.507

2.023

0.305

-2.878

-0.879

-0.392

 

(0.499)

(0.241)

(0.357)

(0.172)

(0.991)

(0.182)

(0.704)

(p/100)×Non-union

0.553

-0.547

-2.043

-0.348

2.755

0.826

0.339

 

(0.497)

(0.226)

(0.341)

(0.154)

(0.969)

(0.155)

(0.700)

Male

0.620

–

–

–

1.003

–

–

 

(0.030)

–

–

–

(0.063)

–

–

High School

0.056

–

–

–

0.230

–

–

 

(0.047)

–

–

–

(0.068)

–

–

Junior College

0.111

–

–

–

0.258

–

–

 

(0.069)

–

–

–

(0.068)

–

–

University

0.126

–

–

–

0.297

–

–

 

(0.056)

–

–

–

(0.026)

–

–

Graduate School

0.262

–

–

–

0.479

–

–

 

(0.059)

–

–

–

(0.325)

–

–

Experience

0.021

0.097

0.099

0.089

0.020

0.169

0.144

 

(0.006)

(0.020)

(0.049)

(0.023)

(0.029)

(0.017)

(0.027)

Experience 2/100

-0.051

-0.168

-0.113

-0.164

-0.081

-0.269

-0.267

 

(0.009)

(0.038)

(0.095)

(0.038)

(0.046)

(0.040)

(0.036)

Tenure

0.045

0.040

0.000

0.046

0.072

0.024

0.032

 

(0.008)

(0.042)

(0.094)

(0.044)

(0.028)

(0.101)

(0.101)

Tenure 2/100

-0.058

-0.040

-0.082

-0.052

-0.067

0.062

0.058

 

(0.011)

(0.069)

(0.186)

(0.067)

(0.045)

(0.213)

(0.205)

Married

0.055

-0.001

-0.044

-0.001

0.042

0.234

0.221

 

(0.049)

(0.033)

(0.075)

(0.031)

(0.105)

(0.282)

(0.282)

Number of Children

0.014

-0.013

0.048

-0.014

0.011

-0.018

-0.014

 

(0.023)

(0.024)

(0.026)

(0.024)

(0.037)

(0.059)

(0.059)

ln(Firm Size)

0.021

-0.004

-0.020

-0.004

0.131

0.060

0.057

 

(0.008)

(0.010)

(0.017)

(0.010)

(0.029)

(0.022)

(0.023)

Test for Downward Rigidity

No

No

Yes ∗

No

No

No

No

Industry Dummies

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Regional Dummies

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Occupation Dummies

Yes

Yes

Yes

Yes

Yes

Yes

Yes

R-squared

0.558

0.081

0.120

0.081

0.498

0.042

0.043

Observations

1832

1832

963

1832

1832

1832

1832

  1. Note: *The sample in Column 3 is restricted to individuals in industries facing a decline in the CPI in each year. Standard errors clustered at industry levels are in parentheses under the regression coefficients. The reference group for the education dummy variables is “Junior High School.” CPI is the annual industry-level consumer price index reported in Table 1. The gross-output deflator is the annual industry-level output deflator reported in Table 2.
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