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Working in family firms: less paid but more secure? Evidence from French matched employer-employee data

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Author Info

  • Andrea Bassanini
  • Eve Caroli
  • Antoine Rebérioux
  • Thomas Breda

Abstract

We study compensation packages in family and non-family firms. Using French matched employer-employee data, we first show that family firms pay on average lower wages. We find that part of this wage gap is due to low wage workers sorting into family firms and high wage workers sorting into non-family firms. However, we also find evidence that company wage policies differ according to ownership status, so that the same worker is paid differently under family and non-family firm ownership. We also find evidence that family firms are characterised by lower job insecurity, as measured by dismissal rates and by the subjective risk of dismissal perceived by workers. In addition, family firms appear to rely less on dismissals – and more on hiring reductions – than non-family firms when they downsize. We show that compensating wage differentials account for a substantial part of the inverse relationship between the family/non-family gaps in wages and job security.

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Bibliographic Info

Paper provided by University of Paris West - Nanterre la Défense, EconomiX in its series EconomiX Working Papers with number 2011-38.

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Length: 48 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:drm:wpaper:2011-38

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Keywords: family firms; wages; job security; compensating wage differentials; linked employer-employee data;

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References

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Family firms are like public employers
    by Economic Logician in Economic Logic on 2011-10-20 13:30:00
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Cited by:
  1. Block, Jörn & Goerke, Laszlo & Millán, José María & Román, Concepción, 2014. "Family employees and absenteeism," Economics Letters, Elsevier, Elsevier, vol. 123(1), pages 94-99.
  2. Andrea Bassanini & Eve Caroli & Antoine Rebérioux & Thomas Breda, 2011. "Working in family firms: less paid but more secure? Evidence from French matched employer-employee data," EconomiX Working Papers 2011-38, University of Paris West - Nanterre la Défense, EconomiX.
  3. Andrew Ellul & Marco Pagano & Fabiano Schivardi, 2014. "Employment and Wage Insurance within Firms: Worldwide Evidence," CSEF Working Papers, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy 369, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  4. Siebert, W. Stanley & Peng, Fei & Maimaiti, Yasheng, 2011. "HRM Practices and Performance of Family-Run Workplaces: Evidence from the 2004 WERS," IZA Discussion Papers 5899, Institute for the Study of Labor (IZA).
  5. Leandro DÂ’Aurizio & Livio Romano, 2013. "Family firms and the Great Recession: out of sight, out of mind?," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 905, Bank of Italy, Economic Research and International Relations Area.
  6. Bjuggren, Carl Magnus, 2014. "Sensitivity to Shocks and Implicit Employment Protection in Family Firms," Working Paper Series, Research Institute of Industrial Economics 1028, Research Institute of Industrial Economics.
  7. Leandro D’Aurizio & Tommaso Oliviero & Livio Romano, 2014. "Family Firms, Soft Information and Bank Lending in a Financial Crisis," CSEF Working Papers, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy 357, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  8. Ferrari, Filippo, 2013. "'The employees are all equal... but some are more equals than others'. Altruism, opportunism and discrimination in family SMEs," MPRA Paper 52391, University Library of Munich, Germany.

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