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Establishment age and wages: evidence from German linked employer-employee data

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  • Kölling, Arnd
  • Schnabel, Claus
  • Wagner, Joachim

Abstract

Prominent reasons why people make more or less money in the labor market include personal characteristics of the employee (e.g., human capital), job characteristics, and characteristics of the employer (e.g., firm size). An emerging empirical literature suggests that one hitherto overlooked firm characteristic matters, too: Employers who are in business for a longer period of time tend to pay higher wages. Using a unique set of linked employer-employee data we present the first empirical evidence on this firm age - wage nexus for Germany. We find that older firms pay on average higher wages for workers with the same broadly defined degree of formal qualification. This firm age differential vanishes after controlling for further worker characteristics and other firm characteristics besides age; if anything, younger firms pay more ceteris paribus. -- Zu den häufig genannten Gründen, warum Arbeitnehmer mehr oder weniger verdienen, zählen u.a. persönliche Charakteristika (wie Humankapital), Arbeitsplatzmerkmale und Arbeitgebercharakteristika (wie Firmengröße). Eine zunehmende empirische Literatur deutet darauf hin, dass ein bisher übersehenes Firmenmerkmal ebenfalls eine Rolle spielt: Arbeitgeber, deren Firma schon länger besteht, zahlen tendenziell höhere Löhne. Unter Verwendung eines einzigartigen Arbeitgeber-Arbeitnehmer-Datensatzes präsentieren wir erste empirische Ergebnisse für Deutschland zu diesem Zusammenhang. Wir stellen fest, dass innerhalb vergleichbarer Arbeitnehmergruppen ältere Firmen im Durchschnitt höhere Löhne zahlen. Dieser Firmenalterunterschied verschwindet jedoch, wenn für weitere Arbeitnehmer- und Firmenmerkmale kontrolliert wird; falls überhaupt ein Unterschied besteht, dann zahlen jüngere Firmen ceteris paribus mehr.

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Bibliographic Info

Paper provided by Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics in its series Discussion Papers with number 13.

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Date of creation: 2002
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Handle: RePEc:zbw:faulre:13

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Web page: http://www.arbeitsmarkt.wiso.uni-erlangen.de/english-version/
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Keywords: Establishment age; wage; linked employer-employee data; Germany;

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References

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  1. Abowd, John M. & Kramarz, Francis, 1999. "The analysis of labor markets using matched employer-employee data," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 40, pages 2629-2710 Elsevier.
  2. Charles Brown & James L. Medoff, 2001. "Firm Age and Wages," NBER Working Papers 8552, National Bureau of Economic Research, Inc.
  3. Blanchflower, David G & Oswald, Andrew J, 1990. " The Wage Curve," Scandinavian Journal of Economics, Wiley Blackwell, vol. 92(2), pages 215-35.
    • David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, December.
  4. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March.
  5. Oi, Walter Y. & Idson, Todd L., 1999. "Firm size and wages," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 33, pages 2165-2214 Elsevier.
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Cited by:
  1. Christophe Muller & Christophe Nordman, 2004. "Which Human Capital Matters For Rich And Poor'S Wages: Evidence From Matched Worker-Firm Data From Tunisia," Working Papers. Serie AD 2004-28, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  2. Addison, John T. & Teixeira, Paulino & Zwick, Thomas, 2006. "Works councils and the anatomy of wages," ZEW Discussion Papers 06-86, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Udo Brixy & Susanne Kohaut & Claus Schnabel, 2007. "Do Newly Founded Firms Pay Lower Wages? First Evidence from Germany," Small Business Economics, Springer, vol. 29(1), pages 161-171, June.
  4. Brixy, Udo & Kohaut, Susanne & Schnabel, Claus, 2005. "How fast do newly founded firms mature? : empirical analyses on job quality in start-ups," IAB Discussion Paper 200502, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  5. Arranz-Aperte, Laura & Heshmati, Almas, 2003. "Determinants of Profit Sharing in the Finnish Corporate Sector," IZA Discussion Papers 776, Institute for the Study of Labor (IZA).
  6. Christophe Muller, Christophe J. Nordman, 2008. "Intra-Firm Human Capital Externalities in Tunisia," THEMA Working Papers 2008-38, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  7. John T. Addison & Paulino Teixeira & Thomas Zwick, 2006. "The Impact of Works Councils on Wages," GEMF Working Papers 2006-08, GEMF - Faculdade de Economia, Universidade de Coimbra.
  8. Schnabel, Claus, 2005. "Gewerkschaften und Arbeitgeberverbände: Organisationsgrade, Tarifbindung und Einflüsse auf Löhne und Beschäftigung," Discussion Papers 34, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  9. Muller, Christophe & Nordman, Christophe Jalil, 2011. "Within-Firm Human Capital Externalities in Tunisia," Economics Papers from University Paris Dauphine 123456789/10593, Paris Dauphine University.
  10. Alda, Holger & Bender, Stefan & Gartner, Hermann, 2005. "The linked employer-employee dataset of the IAB (LIAB)," IAB Discussion Paper 200506, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  11. Arrantz-Aperte, Laura & Heshmati, Almas, 2003. "Determinants of Profit Sharing in the Finnish Sector," Working Papers 492, Hanken School of Economics.

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