Wage Stagnation and the Decline of Standardized Pay Rates, 1974–1991
Name
massenkoff-wilmers-2022-wage-stagnation-and-the-decline-of-standardized-pay-rates-1974-1991.pdf
Description
Published version
Size
907.84 KB
Format
Adobe PDF
Checksum (MD5)
2641750d5878fce88ddcd70e514fce78
Author(s)
Massenkoff, Maxim
Wilmers, Nathan
Date Issued
January 2023
Journal
American Economic Journal: Applied Economics
Publisher
American Economic Association
Citation
Massenkoff, Maxim and Wilmers, Nathan. 2023. "Wage Stagnation and the Decline of Standardized Pay Rates, 1974–1991." American Economic Journal: Applied Economics, 15 (1).
Version
Final published version
Abstract
Using new establishment-by-occupation microdata, we show that the use of discretionary wage setting significantly expanded in the 1970s and 1980s. Increasingly, wages for blue-collar workers were not standardized by job title or seniority but instead subject to managerial discretion. When establishments abandoned standardized pay rates, wages fell, particularly for the lowest-paid workers in a job and for those in establishments that previously paid above market rates. This shift away from standardized pay rates, in context of a broader decline in worker bargaining power, accelerated the decline in real wages experienced by blue-collar workers in the 1980s. (JEL J31, J33, J52, M52, O33)
MIT Department
Sloan School of Management
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
Persistent DSpace Link
DOI of Published Version
10.1257/app.20200819
