IDEAS home Printed from https://ideas.repec.org/a/tpr/restat/v91y2009i1p213-218.html
   My bibliography  Save this article

Why Do Big Firms Pay Higher Wages? Evidence from an International Database

Author

Listed:
  • John Gibson

    (Department of Economics, University of Waikato)

  • Steven Stillman

    (Motu Economic and Public Policy Research)

Abstract

Bigger firms pay higher wages. This note reports tests of the hypothesis that this big-firm premium (BFP) occurs because workers in big firms are more skilled. We use the International Adult Literacy Survey, which gives richer skill measures than those typically available in labor market surveys, to measure the BFP in nine countries with and without controls for worker skill. The results show that the BFP is not as universal as is often suggested, but in countries where it exists controlling for skills does little to reduce the size of the BFP. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • John Gibson & Steven Stillman, 2009. "Why Do Big Firms Pay Higher Wages? Evidence from an International Database," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 213-218, February.
    • Handle: RePEc:tpr:restat:v:91:y:2009:i:1:p:213-218
    as

    Download full text from publisher

    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/rest.91.1.213
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jha, Priyaranjan & Rodriguez-Lopez, Antonio, 2021. "Monopsonistic labor markets and international trade," European Economic Review, Elsevier, vol. 140(C).
    2. Steven B. Caudill & Charles O. Kroncke & Franklin G. Mixon, 2021. "Is there a firm size‐wage gap after economic transition? – An examination of for‐profit and not‐for‐profit firms in Estonia," LABOUR, CEIS, vol. 35(4), pages 435-449, December.
    3. Yongjin Wang & Laixun Zhao, 2013. "Saving Good Jobs under Global Competition by Rewarding Quality and Efforts," Discussion Paper Series DP2013-17, Research Institute for Economics & Business Administration, Kobe University, revised May 2013.
    4. Zhu, Rong, 2011. "NILS Working paper no 170. The impact of major--job mismatch on college graduates' early career earnings," NILS Working Papers 26072, National Institute of Labour Studies.
    5. Aleksandra Majchrowska & Paweł Strawiński, 2016. "Regional Differences in Gender Wage Gaps in Poland: New Estimates Based on Harmonized Data for Wages," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 8(2), pages 115-141, June.
    6. Vincenzo Scoppa, 2014. "Firm Size and Wages in Italy: Evidence from Exogenous Job Displacements," Manchester School, University of Manchester, vol. 82(6), pages 677-700, December.
    7. John Gibson, 2009. "The public sector pay premium, compensating differentials and unions: propensity score matching evidence from Australia, Canada, Great Britain and the United States," Economics Bulletin, AccessEcon, vol. 29(3), pages 2325-2332.
    8. Feng, Shuaizhang, 2009. "Return to Training and Establishment Size: A Reexamination of the Size-Wage Puzzle," IZA Discussion Papers 4143, Institute of Labor Economics (IZA).
    9. Rui Baptista & Francisco Lima & Miguel Preto, 2013. "Entrepreneurial skills and workers’ wages in small firms," Small Business Economics, Springer, vol. 40(2), pages 309-323, February.
    10. Michael Mitsopoulos, 2017. "Overtaxation of Private Sector Salaried Employment as a Key Impediment to the Recovery of Greece," Palgrave Macmillan Studies in Banking and Financial Institutions, in: Dimitrios D. Thomakos & Konstantinos I. Nikolopoulos (ed.), Taxation in Crisis, chapter 12, pages 289-336, Palgrave Macmillan.
    11. Haußen, Tina & Haussen, Tina, 2016. "Job Changes and Interregional Migration of Graduates," VfS Annual Conference 2016 (Augsburg): Demographic Change 145618, Verein für Socialpolitik / German Economic Association.
    12. John Gibson, 2009. "The rising public sector pay premium in the New Zealand labour market," New Zealand Economic Papers, Taylor & Francis Journals, vol. 43(3), pages 255-261.
    13. Colin Green & John S. Heywood & Nikolaos Theodoropoulos, 2017. "Employer size and supervisor earnings: Evidence from Britain," University of Cyprus Working Papers in Economics 04-2017, University of Cyprus Department of Economics.
    14. Pekkala Kerr, Sari & Kerr, William, 2020. "Immigrant entrepreneurship in America: Evidence from the survey of business owners 2007 & 2012," Research Policy, Elsevier, vol. 49(3).
    15. Shuaizhang Feng & Lars Lefgren & Brennan C. Platt & Bingyong Zheng, 2019. "Job search under asymmetric information: endogenous wage dispersion and unemployment stigma," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 67(4), pages 817-851, June.
    16. Colin P. Green & John S. Heywood & Nikolaos Theodoropoulos, 2021. "Hierarchy and the Employer Size Effect on Wages: Evidence from Britain," Economica, London School of Economics and Political Science, vol. 88(351), pages 671-696, July.
    17. Antonelli, Cristiano & Scellato, Giuseppe, 2019. "Wage inequality and directed technological change: Implications for income distribution," Technological Forecasting and Social Change, Elsevier, vol. 141(C), pages 59-65.
    18. Tina Haussen & Silke Uebelmesser, 2018. "No Place Like Home? Graduate Migration in Germany," Growth and Change, Wiley Blackwell, vol. 49(3), pages 442-472, September.
    19. Lang, Youze & Zhu, Weichao, 2020. "Holdup and wage dispersion," Economic Modelling, Elsevier, vol. 90(C), pages 135-142.
    20. Rong Zhu, 2014. "The impact of major-job mismatch on college graduates' early career earnings: evidence from China," Education Economics, Taylor & Francis Journals, vol. 22(5), pages 511-528, October.
    21. Wang, Yongjin & Zhao, Laixun, 2015. "Saving good jobs from global competition by rewarding quality and efforts," Journal of International Economics, Elsevier, vol. 96(2), pages 426-434.
    22. Shannon, Matthew, 2022. "The labour market outcomes of transgender individuals," Labour Economics, Elsevier, vol. 77(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:restat:v:91:y:2009:i:1:p:213-218. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kelly McDougall (email available below). General contact details of provider: https://direct.mit.edu/journals .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.