TY  - JOUR
AU  - Allen,Steven G.
TI  - Changes in the Cyclical Sensitivity of Wages in the United States, 1891-1987
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3854
PY  - 1991
Y2  - September 1991
UR  - http://www.nber.org/papers/w3854
L1  - http://www.nber.org/papers/w3854.pdf
N1  - Author contact info:
Steven G. Allen
Jenkins Graduate School of Management
NC State University
2124 Nelson Hall
P.O.Box 7229
Raleigh, NC  27695-7229
Tel: 919/515-6941
Fax: 919/515-5073
E-Mail: steve_allen@ncsu.edu
AB  - The conventional wisdom that nominal wages became less sensitive to the business cycle and more autocorrelated after World War II is reexamined here by considering whether these properties are artifacts of the methods used to construct prewar wage series. A replication based on these methods is more cyclically sensitive and exhibits less autocorrelation than the postwar data. Aggregation using variable instead of fixed employment weights also greatly exaggerates the cyclicality of prewar wages. These biases imply that wages are just as sensitive to the cycle today as 100 years ago, perhaps even more so.
ER  -