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Establishment Wage Differentials

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Author Info
Lane, Julia I. () (The National Opinion Research Center (NORC) and IZA)
Salmon, Laurie A. () (U.S. Bureau of Labor Statistics)
Spletzer, James R. () (U.S. Bureau of Labor Statistics)

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Abstract

Economists have long known that individual wages depend on a combination of employee and employer characteristics, as well as the interaction of the two. Although it is important to understand how employee and employer characteristics are related to wages, little is known about the magnitude and relation of these wage effects. This is primarily due to the lack of microdata which links individuals to the establishments where they work, but also due to technical difficulties associated with separating out employee and employer effects. This paper uses data from the Occupational Employment Statistics program at the Bureau of Labor Statistics that permit both of these issues to be addressed. Our results show that employer effects contribute substantially to earnings differences across individuals. We also find that establishments that pay well for one occupation also pay well for others. This paper contributes to the growing literature that analyzes firms’ compensation policies, and specifically the topic of employer effects on wages.

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Paper provided by U.S. Bureau of Labor Statistics in its series Working Papers with number 403.

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Length: 36 pages
Date of creation: Mar 2007
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Handle: RePEc:bls:wpaper:ec070020

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Related research
Keywords: Establishment Wage Differentials Occupational Employment Statistics

Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. John Haltiwanger & Julia Lane & James Spletzer, 2000. "Wages, Productivity, and the Dynamic Interaction of Businesses and Workers," NBER Working Papers 7994, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
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