Wage Structure and Firm Productivity in Belgium
AbstractThe objective of this paper is twofold. First, we analyse the structure of wages within and between Belgian firms. Next, we examine how the productivity of these firms is influenced by their internal wage dispersion. To do so, we use a large matched employer-employee data set (i.e., a combination of the 1995 'Structure of Earnings' and 'Structure of Business' Surveys). On the basis of the methodology developed by Winter-Ebmer and Zweimuller (1999), we find that within-firm wage dispersion has a positive and significant effect on firm productivity. This result is robust to controls for individual and firm characteristics as well as to instrumenting the wage inequality variable. Findings also suggest that the intensity of this effect is stronger within firms with: i) a majority of blue-collar workers, and ii) a high degree of monitoring. These results are more in line with the 'tournament' models than with the 'fairness, morale and cohesiveness' models.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12978.
Date of creation: Mar 2007
Date of revision:
Publication status: published as Thierry Lallemand, Robert Plasman, François Rycx. "Wage Structure and Firm Productivity in Belgium ," in Edward P. Lazear and Kathryn L. Shaw, editors, "The Structure of Wages: An International Comparison" University of Chicago Press (2008)
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Other versions of this item:
- Robert Plasman & Thierry Lallemand & François Rycx, 2005. "Wage structure and firm productivity in Belgium," ULB Institutional Repository 2013/8058, ULB -- Universite Libre de Bruxelles.
- Thierry Lallemand & Robert Plasman & François Rycx, 2009. "Wage structure and firm productivity in Belgium," ULB Institutional Repository 2013/8733, ULB -- Universite Libre de Bruxelles.
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-03-31 (All new papers)
- NEP-BEC-2007-03-31 (Business Economics)
- NEP-EFF-2007-03-31 (Efficiency & Productivity)
- NEP-LAB-2007-03-31 (Labour Economics)
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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- Thierry Lallemand & Robert Plasman & François Rycx, 2004.
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Wiley Blackwell, vol. 57(4), pages 533-558, November.
- François Rycx & Thierry Lallemand & Robert Plasman, 2004. "Intra-firm wage dispersion and firm performance: evidence from linked employer-employee data," ULB Institutional Repository 2013/781, ULB -- Universite Libre de Bruxelles.
- Milgrom, Paul & Roberts, John, 1990. "The Efficiency of Equity in Organizational Decision Processes," American Economic Review, American Economic Association, vol. 80(2), pages 154-59, May.
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