Research Discussion Paper – RDP 2000-08 Nominal Wage Rigidity in Australia

Contents

• Introduction
• The Rationale for Downward Wage Rigidity
• Interpreting Nominal Wage Changes
• The Distribution of Wage Changes in Australia
• Further Evidence of Downward Nominal Wage Rigidity
• Whose Wages are Rigid?
• Are Broader Measures of Remuneration More Flexible?
• Assessment
• Conclusions
• Appendix A: Data
• Appendix B: Comparing Broad Measures of Remuneration
• References

We would like to thank the staff of Mercer Cullen Egan Dell, particularly Jenny Butcher, Lee-Joseph Custodio, Matthew Drinan and Paul Gilet, for allowing us to use their data set and sharing with us valuable institutional knowledge about wage formation in Australia. We would also like to thank Adam Cagliarini, David Gruen, John Simon, Guy Debelle and other colleagues from the Reserve Bank for helpful comments. The views expressed herein are those of the authors and do not necessarily reflect those of the Reserve Bank of Australia.