Sticky wage norms drive real earnings losses during inflation

Erik Hurst of the University of Chicago presented evidence showing that firm-level norms for nominal wage increases adjusted only modestly during recent inflation in the United States.

Utilizing detailed US payroll data, the study demonstrates that rigid wage-setting practices caused persistent real wage losses for a substantial share of employees.

Workers primarily mitigated these real income declines through job changes and off-cycle pay adjustments.

In the second keynote, Barbara Petrongolo of the University of Oxford examined matched Danish employer-employee and health records.

Her findings show that employment generates sizeable positive mental-health effects, while individual firm environments drive systematic differences in employee psychological well-being.

The workshop brought together researchers evaluating structural labor market dynamics through microeconomic administrative records.

Sessions addressed employer wage-setting power, employment protection legislation, job displacement costs, and matching frictions.

Additional papers analyzed migration patterns, gender and family inequalities, and the specific role of managerial practices in shaping employee productivity.

The contributions focused on quantifying how public policy interventions alter firm adjustments and worker outcomes following economic shocks.