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Firm Size-Wage Premiums: Using Employer Data to Unravel the Mystery

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Author Info

  • Roberto Pedace

Abstract

Research on establishment size-wage effects has consistently shown a positive relationship between the number of employees and workers' wages. While several theories have been offered to explain these outcomes, the use of data with limited employer characteristics make for a dubious connection between theory and results. This study examines the firm size-wage effect using a dataset that captures typical worker demographics, but also contains employer information not typically captured in larger datasets. The results provide strong evidence that these wage effects are the result of several forces, including worker sorting/matching, efficiency wages, internal labor markets, and, to a lesser degree, working conditions.

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File URL: http://mesharpe.metapress.com/link.asp?target=contribution&id=U801804182748857
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Bibliographic Info

Article provided by M.E. Sharpe, Inc. in its journal Journal of Economic Issues.

Volume (Year): 44 (2010)
Issue (Month): 1 (March)
Pages: 163-182

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Handle: RePEc:mes:jeciss:v:44:y:2010:i:1:p:163-182

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Web page: http://www.mesharpe.com/mall/results1.asp?acr=jei

Related research

Keywords: firm size-wage effects; sorting; capital-labor complementarity; rent sharing; efficiency wages;

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Cited by:
  1. Wunnava, Phanindra V., 2012. "Recent Longitudinal Evidence of Size and Union Threat Effects across Genders," IZA Discussion Papers 6779, Institute for the Study of Labor (IZA).
  2. Bernhardt, Annette, 2014. "Labor Standards and the Reorganization of Work: Gaps in Data and Research," Institute for Research on Labor and Employment, Working Paper Series qt3hc6t3d5, Institute of Industrial Relations, UC Berkeley.
  3. Vincenzo Scoppa, 2012. "Firm Size And Wages In Italy: Evidence From Exogenous Job Displacements," Working Papers 201201, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).

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