Has Compensation Become More Flexible?

Posted: 2 Oct 2000

See all articles by Sandra A. Cannon

Sandra A. Cannon

Government of the United States of America - Division of Research and Statistics

Bruce Fallick

Federal Reserve Banks - Federal Reserve Bank of Cleveland

Michael Lettau

Bureau of Labor Statistics

Raven E. Saks

U.S. Federal Reserve - Division of Research and Statistics

Date Written: April 2000

Abstract

In recent years, numerous observers have argued that global competition, increased reliance on contingent workers, and the breakdown of implicit contracts have made compensation practices in the United States more flexible; in particular, employers have become more concerned with how an employee's pay compares to that in other firms and less concerned with considerations of equity or relative pay within the firm. This paper uses establishment-level data from the Bureau of Labor Statistics' Employment Cost Index program to examine this claim by asking whether the variances of compensation within and between establishments have moved in a more "flexible" direction over the 1980s and 1990s.

Keywords: wage inequality, wage compression, pay equity

JEL Classification: J31, E24

Suggested Citation

Cannon, Sandra A. and Fallick, Bruce and Lettau, Michael and Saks, Raven E., Has Compensation Become More Flexible? (April 2000). FEDS Working Paper No. 2000-27. Available at SSRN: https://ssrn.com/abstract=234158

Sandra A. Cannon

Government of the United States of America - Division of Research and Statistics

20th and C Streets, NW
Washington, DC 20551
United States

Bruce Fallick (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Cleveland ( email )

East 6th & Superior
Cleveland, OH 44101-1387
United States

Michael Lettau

Bureau of Labor Statistics

2 Massachusetts Avenue, NE
Washington, DC 20212
United States

Raven E. Saks

U.S. Federal Reserve - Division of Research and Statistics ( email )

20th and C Streets, NW
Washington, DC 20551
United States

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