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Abstract

A positive wage-firm size relationship is well documented in the empirical literature in industrial organization and labor economics. Firm size seems to proxy various unobserved determinants such as job satisfaction, monitoring costs, more complex technologies, and worker participation in monopoly profits. It is generally argued that the greater the possibility of controlling for these latent factors, the less likely that a significant size effect will appear. This paper attempts to distinguish firm size from other wage determinants for a rich data source for West Germany and demonstrates the persistence of the size premium. Copyright 1991 by MIT Press.

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Bibliographic Info

Paper provided by Princeton University, Department of Economics, Industrial Relations Section. in its series Working Papers with number 644.

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Date of creation: May 1990
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Handle: RePEc:pri:indrel:644

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Related research

Keywords: firm size-wage differentials; earnings functions; compulsory wage differentials; work characteristics;

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Find related papers by JEL classification:

• H19 - Public Economics - - Structure and Scope of Government - - - Other

References

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1. Dunn, L F, 1986. "Work Disutility and Compensating Differentials: Estimation of Factors in the Link between Wages and Firm Size," The Review of Economics and Statistics, MIT Press, vol. 68(1), pages 67-73, February.
2. Heywood, John S, 1986. "Labor Quality and the Concentration-Earnings Hypothesis," The Review of Economics and Statistics, MIT Press, vol. 68(2), pages 342-46, May.
3. Strand, Jon, 1987. "The Relationship between Wages and Firm Size: An Information Theoretic Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 28(1), pages 51-68, February.
4. Abraham, Katharine G & Farber, Henry S, 1987. "Job Duration, Seniority, and Earnings," American Economic Review, American Economic Association, vol. 77(3), pages 278-97, June.
   
   • Katharine G. Abraham & Henry S. Farber, 1987. "Job Duration, Seniority, and Earnings," NBER Working Papers 1819, National Bureau of Economic Research, Inc.
   • Katharine G. Abraham & Henry S. Farber, 1986. "Job Duration, Seniority and Earnings," Working papers 407, Massachusetts Institute of Technology (MIT), Department of Economics.
5. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
6. Shelly J. Lundberg, 1984. "Tied Wage-Hours Offers and the Endogeneity of Wages," NBER Working Papers 1431, National Bureau of Economic Research, Inc.
   
   • Lundberg, Shelly J, 1985. "Tied Wage-Hours Offers and the Endogeneity of Wages," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 405-10, August.

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