IDEAS home Printed from https://ideas.repec.org/a/taf/apeclt/v12y2005i2p95-100.html
   My bibliography  Save this article

Job search skills, employer size and wages

Author

Listed:
  • Daniel Millimet

Abstract

Many theories concerning the underlying cause of the observed positive correlation between employer size and wages have been evaluated empirically, with a sizeable residual remaining unexplained. This study presents and tests a new theory: successful applicants for vacancies in larger employers possess greater job search skills and therefore are able to obtain a wage closer to their maximum potential wage. Empirical results confirm that differential job search abilities can account for approximately 20% of the difference in average observed wages across large and small employers.

Suggested Citation

  • Daniel Millimet, 2005. "Job search skills, employer size and wages," Applied Economics Letters, Taylor & Francis Journals, vol. 12(2), pages 95-100.
  • Handle: RePEc:taf:apeclt:v:12:y:2005:i:2:p:95-100
    DOI: 10.1080/1350485042000314316
    as

    Download full text from publisher

    File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/1350485042000314316&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/1350485042000314316?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    2. Josef Zweimuller & Rudolf Winter-Ebmer, 1999. "Firm-Size Wage Differentials in Switzerland: Evidence from Job-Changers," American Economic Review, American Economic Association, vol. 89(2), pages 89-93, May.
    3. Barron, John M & Bishop, John & Dunkelberg, William C, 1985. "Employer Search: The Interviewing and Hiring of New Employees," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 43-52, February.
    4. Brown, Charles & Medoff, James, 1989. "The Employer Size-Wage Effect," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1027-1059, October.
    5. David S. Evans & Linda S. Leighton, 1989. "Why Do Smaller Firms Pay Less?," Journal of Human Resources, University of Wisconsin Press, vol. 24(2), pages 299-318.
    6. Daneshvary, Nasser, et al, 1992. "Job Search and Immigrant Assimilation: An Earnings Frontier Approach," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 482-492, August.
    7. Polachek, Solomon W & Yoon, Bong Joon, 1987. "A Two-tiered Earnings Frontier Estimation of Employer and Employee Information in the Labor Market," The Review of Economics and Statistics, MIT Press, vol. 69(2), pages 296-302, May.
    8. 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.
    9. Kenneth R. Troske & Kimberly Bayard, 1999. "Examining the Employer-Size Wage Premium in the Manufacturing, Retail Trade, and Service Industries Using Employer-Employee Matched Data," American Economic Review, American Economic Association, vol. 89(2), pages 99-103, May.
    10. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Steven B. Caudill & Charles O. Kroncke & Franklin G. Mixon, 2021. "Is there a firm size‐wage gap after economic transition? – An examination of for‐profit and not‐for‐profit firms in Estonia," LABOUR, CEIS, vol. 35(4), pages 435-449, December.
    2. Kristina Nyström & Gulzat Elvung, 2014. "New firms and labor market entrants: Is there a wage penalty for employment in new firms?," Small Business Economics, Springer, vol. 43(2), pages 399-410, August.
    3. Solomon W. Polachek, 2017. "Heterogeneity in the Labor Market: Ability and Information Acquisition," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 43(3), pages 377-390, June.
    4. Kristina Nyström, 2021. "Working for an entrepreneur: heaven or hell?," Small Business Economics, Springer, vol. 56(2), pages 919-931, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lixin Cai & C. Jeffrey Waddoups, 2009. "The Role of Unobserved Heterogeneity and On-the-Job Training in the Employer Size-Wage Effect: Evidence from Australia," Working Papers 0915, University of Nevada, Las Vegas , Department of Economics.
    2. Thierry Lallemand & Robert Plasman & François Rycx, 2007. "The establishment-size wage premium: evidence from European countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 34(5), pages 427-451, December.
    3. Green, Colin & Heywood, John S. & Theodoropoulos, Nikolaos, 2017. "Employer Size and Supervisor Earnings: Evidence from Britain," GLO Discussion Paper Series 136, Global Labor Organization (GLO).
    4. Miguel Marcelle & Eric Strobl, 2003. "Do Smaller Firms Pay Less in the Caribbean? The Case of Trinidad and Tobago," Journal of Development Studies, Taylor & Francis Journals, vol. 39(5), pages 181-198.
    5. Alexander Muravyev, 2007. "Firm Size, Wages and Unobserved Skills: Evidence from Dual Job Holdings in the UK," Discussion Papers of DIW Berlin 681, DIW Berlin, German Institute for Economic Research.
    6. Strobl, Eric & Thornton, Robert, 2002. "Do Large Employers Pay More in Developing Countries? The Case of Five African Countries," IZA Discussion Papers 660, Institute of Labor Economics (IZA).
    7. Nikolaj Malchow-Møller & James R. Markusen & Bertel Schjerning, 2013. "Foreign Firms, Domestic Wages," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(2), pages 292-325, April.
    8. Beatriz Muriel Hernández, 2016. "An Analysis of Firm Characteristics as Earnings Determinants: The Urban Bolivia Case," Development Research Working Paper Series 04/2016, Institute for Advanced Development Studies.
    9. Catherine Ris & Othman Joumady, 2005. "Diffusion du capital humain et efficience salariale. Une application sur données appariées employé-employeur," Économie et Prévision, Programme National Persée, vol. 169(3), pages 127-137.
    10. Thierry Lallemand & François Rycx, 2007. "Employer Size and the Structure of Wages: A Critical Survey," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(2), pages 75-87.
    11. Fackler, Daniel & Müller, Steffen & Stegmaier, Jens, 2017. "Explaining wage losses after job displacement: Employer size and lost firm rents," IWH Discussion Papers 32/2017, Halle Institute for Economic Research (IWH).
    12. Kelly D. Edmiston, 2004. "The role of small business in economic development," Community Affairs Research Working Paper 2005-01, Federal Reserve Bank of Kansas City.
    13. Alexander Muravyev, 2009. "Employer Size, Wages And Unobserved Skills: Evidence From Moonlighters In The Uk," Manchester School, University of Manchester, vol. 77(6), pages 651-674, December.
    14. Majumdar, Sumit K., 2010. "Institutional changes, firm size and wages in the telecommunications sector," Information Economics and Policy, Elsevier, vol. 22(3), pages 201-217, July.
    15. Kelly D. Edmiston, 2007. "The role of small and large businesses in economic development," Economic Review, Federal Reserve Bank of Kansas City, vol. 92(Q II), pages 73-97.
    16. Henrik Cronqvist & Fredrik Heyman & Mattias Nilsson & Helena Svaleryd & Jonas Vlachos, 2009. "Do Entrenched Managers Pay Their Workers More?," Journal of Finance, American Finance Association, vol. 64(1), pages 309-339, February.
    17. Veronique Genre & Karsten Kohn & Daphne Momferatou, 2011. "Understanding inter-industry wage structures in the euro area," Applied Economics, Taylor & Francis Journals, vol. 43(11), pages 1299-1313.
    18. Claudio Michelacci & Vincenzo Quadrini, 2009. "Financial Markets and Wages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(2), pages 795-827.
    19. Jha, Priyaranjan & Rodriguez-Lopez, Antonio, 2021. "Monopsonistic labor markets and international trade," European Economic Review, Elsevier, vol. 140(C).
    20. Feng, Shuaizhang & Zheng, Bingyong, 2009. "Cherry-Picking in Labor Market with Imperfect Information," IZA Discussion Papers 4309, Institute of Labor Economics (IZA).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:apeclt:v:12:y:2005:i:2:p:95-100. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEL20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.