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Employer Size, Wages And Unobserved Skills: Evidence From Moonlighters In The Uk




In this paper we examine the labour quality explanation of the employer size-wage gap: larger firms pay higher wages because they employ more skilled workers. Most previous studies control for unobserved skills of workers by applying the fixed-effects estimator to longitudinal data, thus assuming time-invariant unobserved individual heterogeneity. We release this assumption by using a sample of moonlighters; hence, identification is achieved by differencing across two jobs held simultaneously rather than sequentially. Using the UK Quarterly Labour Force Survey, we find that controlling for unobserved skills in the sample of moonlighters does not reduce the estimate of the wage gap. Copyright © 2009 The Author. Journal compilation © 2009 Blackwell Publishing Ltd and The University of Manchester.

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  • 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.
  • Handle: RePEc:bla:manchs:v:77:y:2009:i:6:p:651-674

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    References listed on IDEAS

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    Cited by:

    1. Binnur Balkan & Semih Tumen, 2016. "Firm-Size Wage Gaps along the Formal-Informal Divide: Theory and Evidence," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(2), pages 235-266, April.
    2. Beatriz Muriel, 2011. "Rethinking Earnings Determinants in the Urban Areas of Bolivia," Development Research Working Paper Series 06/2011, Institute for Advanced Development Studies.
    3. Giulio Bottazzi & Marco Grazzi, 2014. "Dynamics Of Productivity And Cost Of Labour In Italian Manufacturing Firms," Bulletin of Economic Research, Wiley Blackwell, vol. 66(S1), pages 55-73, December.
    4. 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.

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