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Is Bigger Still Better? The Decline of the Wage Premium at Large Firms

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Author Info
Even, William E. () (Miami University)
Macpherson, David A. () (Trinity University)

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Abstract

This study shows that the wage premium paid by large firms fell over the past 20 years and that the decline in the size premium has been most pronounced among the least educated work force. Empirical evidence supports several explanations for the decline in the size premium. First, there has been a convergence in the returns to worker characteristics at large and small firms over time. Second, there has been a convergence in the types of workers employed at small and large firms. Particularly important have been changes in the distribution of workers across industries and the greater rate of decline in unionism at large firms.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4082.

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Length: 28 pages
Date of creation: Mar 2009
Date of revision:
Handle: RePEc:iza:izadps:dp4082

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Related research
Keywords: firm size; wages; fringe benefits;

Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Private Pensions
J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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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.:
  1. Christopher R. Bollinger & Barry T. Hirsch, 2006. "Match Bias from Earnings Imputation in the Current Population Survey: The Case of Imperfect Matching," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 483-520, July. [Downloadable!]
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  2. Meagher, Kieron J. & Wilson, Hugh, 2004. "Different firm size effects on wages for supervisors and workers," Economics Letters, Elsevier, vol. 84(2), pages 225-230, August. [Downloadable!] (restricted)
  3. Yu, Li & Hurley, Terrance M & Kliebenstein, James & Orazem, Peter, 2008. "Firm Size, Technical Change And Wages In The Pork Sector, 1990 -2005," Staff General Research Papers 12921, Iowa State University, Department of Economics. [Downloadable!]
  4. Dale Belman & David I. Levine, 2004. "Size, Skill and Sorting," LABOUR, CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd, vol. 18(4), pages 515-561, December. [Downloadable!] (restricted)
  5. Mellow, Wesley, 1982. "Employer Size and Wages," The Review of Economics and Statistics, MIT Press, vol. 64(3), pages 495-501, August. [Downloadable!] (restricted)
  6. Kostiuk, Peter F, 1990. "Compensating Differentials for Shift Work," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1054-75, October. [Downloadable!] (restricted)
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This page was last updated on 2009-11-23.

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