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Which Wage Dispersion Matters to Firms' Performance?

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  • Lundborg, Per

    (Swedish Institute for Social Research, Stockholm University)

Abstract

Research on wage dispersion and firm performance focuses on intra-firm and inter firm effects irrespective of workers’ profession. We extend the analysis by considering dispersion within professions, within and across firms and within professions economy-wide. We find that the intra-firm dispersion of wages, which research so far has focused on, has limited effects on productivity compared to the economy-wide wage dispersion within the professions. As Swedish firms have differentiated wages among employees during the last 10-15 years also the economy-wide dispersion within professions has increased thus contributing considerably to the strong performance of the Swedish economy in the late 1990's.

Suggested Citation

  • Lundborg, Per, 2007. "Which Wage Dispersion Matters to Firms' Performance?," Working Paper Series 12/2007, Stockholm University, Swedish Institute for Social Research.
    • Handle: RePEc:hhs:sofiwp:2007_012
    as

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    File URL: http://www.sofi.su.se/content/1/c6/03/09/74/WP07no12.pdf
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