Wage Rigidities in Mexico: Evidence from the Administrative Records of the Mexican Social Security Institute (Instituto Mexicano del Seguro Social).

Abstract

We analyze the existence and magnitude of downward nominal wage rigidities in the Mexican labor market. We use data from the administration records of the Instituto Mexicano del Seguro Social (IMSS). These records form a firm level panel data, which allows to follow workers employed in the same firm, and the nominal wage changes they experience through time. We estimate the nominal wage changes density functions, do some standard tests proposed in the literature of the presence of nominal wage rigidities, and extend some of these tests to take into account the presence of minimum wages, and its effect on wage change distribution.downward nominal wage rigidity, minimum wage, social security