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The Wage Policy of Firms - Comparative Evidence for the U.S. and Germany from Personnel Data

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Author Info
Christian Grund

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Abstract

The wage policy of a German and a U.S. firm is comparatively analysed with a focus on the relation between wages and hierarchies. While prior studies examine only one particular firm, in this paper two plants of the same owners with similar production processes in different institutional environments are inspected. Convex wage profiles over the hierarchy levels of both plants are found. The U.S. plant shows considerably higher intensity of intra-firm competition in terms of higher intra-level wage inequality and yearly promotion rate. In contrast, wages are more distinctly attached to hierarchy levels in the German firm, as wage regressions show. The results are discussed in comparison to prior studies.

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File URL: ftp://web.bgse.uni-bonn.de/pub/RePEc/bon/bonedp/bgse30_2002.pdf
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Publisher Info
Paper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse30_2002.

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Length: 26
Date of creation: Oct 2002
Date of revision:
Handle: RePEc:bon:bonedp:bgse30_2002

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Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
Fax: +49 228 73 9221
Web page: http://www.bgse.uni-bonn.de/index.php?id=494

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Related research
Keywords: Hierarchies; Intra-firm wages; Personnel records;

Other versions of this item:

Find related papers by JEL classification:
M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executive Compensation

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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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    Other versions:
  3. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-75, June. [Downloadable!] (restricted)
  4. Blau, Francine D & Kahn, Lawrence M, 1996. "International Differences in Male Wage Inequality: Institutions versus Market Forces," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 791-836, August. [Downloadable!] (restricted)
    Other versions:
  5. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-25, April. [Downloadable!] (restricted)
  6. Ariga, Kenn & Ohkusa, Yasushi & Brunello, Giorgio, 1999. "Fast track: is it in the genes? The promotion policy of a large Japanese firm," Journal of Economic Behavior & Organization, Elsevier, vol. 38(4), pages 385-402, April. [Downloadable!] (restricted)
    Other versions:
  7. Flabbi, Luca & Ichino, Andrea, 2001. "Productivity, seniority and wages: new evidence from personnel data," Labour Economics, Elsevier, vol. 8(3), pages 359-387, June. [Downloadable!] (restricted)
    Other versions:
  8. Edward P. Lazear, 2000. "Performance Pay and Productivity," American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December. [Downloadable!] (restricted)
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    Other versions:
  10. Treble, John & van Gameren, Edwin & Bridges, Sarah & Barmby, Tim, 2001. "The internal economics of the firm: further evidence from personnel data," Labour Economics, Elsevier, vol. 8(5), pages 531-552, December. [Downloadable!] (restricted)
  11. Ransom, Michael & Oaxaca, Ronald L., 2003. "Intrafirm Mobility and Sex Differences in Pay," IZA Discussion Papers 704, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  12. Orrison, Alannah & Schotter, Andrew & Weigelt, Keith, 1997. "On the Design of Optimal Organizations Using Tournaments: An Experimental Examination," Working Papers 97-26, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
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  15. Frey, Bruno S & Oberholzer-Gee, Felix, 1997. "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out," American Economic Review, American Economic Association, vol. 87(4), pages 746-55, September. [Downloadable!] (restricted)
  16. Edward P. Lazear, 1999. "Personnel Economics: Past Lessons and Future Directions," NBER Working Papers 6957, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  18. Jonathan S. Leonard, 1990. "Executive pay and firm performance," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 43(3), pages 13-29, February.
  19. Lima, Francisco & Pereira, Pedro Telhado, 2001. "Careers and Wage Growth within Large Firms," IZA Discussion Papers 336, Institute for the Study of Labor (IZA). [Downloadable!]
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  21. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-84, December. [Downloadable!] (restricted)
  22. Pierre-Andre Chiappori & Bernard Salanie & Julie Valentin, 1999. "Early Starters versus Late Beginners," Journal of Political Economy, University of Chicago Press, vol. 107(4), pages 731-760, August. [Downloadable!] (restricted)
Full references

Cited by:
(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. repec:bep:eapcon:v:5:y:2006:i:1:p:1370-1370 is not listed on IDEAS
  2. Christian Grund & Niels Westergaard-Nielsen, 2005. "The Dispersion of Employees' Wage Increases and Firm Performance," Bonn Econ Discussion Papers bgse3_2005, University of Bonn, Germany. [Downloadable!]
    Other versions:
  3. Kräkel, Matthias & Schöttner, Anja, 2008. "Relative Performance Pay, Bonuses, and Job-Promotion Tournaments," IZA Discussion Papers 3702, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Christine Harbring & Bernd Irlenbusch, 2005. "How Many Winners Are Good to Have? On Tournaments with Sabotage," IZA Discussion Papers 1777, Institute for the Study of Labor (IZA). [Downloadable!]
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