Relationship Between Firm Size, Wage Dispersion and Firm Performance
AbstractA simple theoretical model explains the divergent empirical results concerning the effect of wage dispersion on firm performance. First, causality in the relationship is clarified. Then, through the model, it is shown that firm performance is non-monotonic with respect to wage dispersion. Likewise, it is shown that large firms are more likely to benefit from a dispersed wage structure than small firms.
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Bibliographic InfoArticle provided by Journal of Income Distribution in its journal Journal of Income Distribution.
Volume (Year): 19 (2010)
Issue (Month): 2 (June)
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wage inequality; firm performance;
Find related papers by JEL classification:
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
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