... on the one hand, and firm-specificwage arrangements, in the form of the wage cushion, on the other, are sensitive to the 18 business cycle. Cardoso and Portugal (2005) showed that in Portugal the ... wage and the hourly earnings includingovertime pay. The hourly base wage is defined as the ratio between the monthly base wage and the total number of normal hours worked in the month. The hourly ... 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...