... the Business Cycle Here we examine the extent to which contractual wages, on the one hand, and firm-specificwage arrangements, in the form of the wage cushion, on the other, are sensitive to the 18business ... stage, the regression model includes the year dummies and, in the second stage, the estimatedcoefficients of the year dummies are regressed on the cycle variable.Table 3: Real Wage Sensitivity to the ... pay. The hourly base wage is defined as the ratio between the monthly base wageand the total number of normal hours worked in the month. The hourly earnings includingovertime pay is defined as the...