Wage Changes, Establishment Growth, and the Effect of Composition Bias
AbstractThis paper examines the relationship between wages and employment at the establishment level. It exploits a sample of Italian firms and workers. To correct for a potential labor composition effect, estimations use both the change in the firm's average wage and the mean of individual wage changes within the firm. Expanding firms are characterized by higher wage growth. The establishment's effect also prevails on the industry's effect, suggesting that wage changes result from the workers' accumulation of firm-specific skills, or from some rent-sharing mechanisms. The role of this "inside" factor seems also symmetric between expanding and declining firms.
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Bibliographic InfoArticle provided by Eastern Economic Association in its journal Eastern Economic Journal.
Volume (Year): 31 (2005)
Issue (Month): 2 (Spring)
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Postal: c/o Dr. Alexandre Olbrecht, The Anisfield School of Business 205, Ramapo College, 505 Ramapo Valley Road, Ramapo, New Jersey 07430, USA
Phone: (201) 684-7346
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More information through EDIRC
Bias; Employment; Wage;
Find related papers by JEL classification:
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- M51 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Firm Employment Decisions; Promotions
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