Abstract
An attempt is made to measure the sensitivity of real wages and weeks worked to overall cyclic disturbances using rather refined microdata. While overall results indicate that real wages are “rigid” with weeks worked exhibiting a procyclic pattern, significant contrasts in cyclic patterns are evident between union and nonunion sectors. Furthermore, these cyclic contrasts are generated by worker experience level to ascertain the extent of cyclic variation depending upon years on current job by a worker. An attempt is then made to link these empirical contrasts to patterns that are expected for two theoretical frameworks: an auction market model and an implicit contracting model. This leads to a conclusion that the union sector tends to exhibit implicit contracting characteristics whereas auction market characteristics prevail in the nonunion sector.
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