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Wage differentials across firms: an application of multilevel modelling

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  • A. R. Cardoso

    (Minho University, Braga, Portugal, NIMA and CEPR)

Abstract

Multilevel modelling techniques are applied to a dataset that matches firms and workers, to pinpoint and explain contrasts among company wage policies. Results indicate that wage differences across firms are statistically significant, affecting every parameter of the pay policy (returns to schooling, tenure, experience, the penalty imposed on newly hired workers and on women). Gross labour productivity, average schooling in the firm, firm size and economic sector are relevant forces shaping the contrast between employers' pay policies. Copyright © 2000 John Wiley & Sons, Ltd.

Suggested Citation

  • A. R. Cardoso, 2000. "Wage differentials across firms: an application of multilevel modelling," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(4), pages 343-354.
  • Handle: RePEc:jae:japmet:v:15:y:2000:i:4:p:343-354
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    File URL: http://qed.econ.queensu.ca:80/jae/2000-v15.4/
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    References listed on IDEAS

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    Cited by:

    1. Andrea Manca & Nigel Rice & Mark J. Sculpher & Andrew H. Briggs, 2005. "Assessing generalisability by location in trial-based cost-effectiveness analysis: the use of multilevel models," Health Economics, John Wiley & Sons, Ltd., vol. 14(5), pages 471-485.
    2. Francesca Sgobbi & Fátima Suleman, 2015. "The Value of Transferable Skills," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(4), pages 378-399, September.
    3. Julie L. Hotchkiss & M. Melinda Pitts & Mary Beth Walker, 2017. "Impact of first birth career interruption on earnings: evidence from administrative data," Applied Economics, Taylor & Francis Journals, vol. 49(35), pages 3509-3522, July.
    4. Stefan Hochguertel & Henry Ohlsson, 2009. "Compensatory inter vivos gifts," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(6), pages 993-1023.
    5. BROSIUS Jacques & RAY Jean-Claude & VERHEYDEN Bertrand & WILLIAMS Donald R., 2014. "Wage differentials between natives and cross-border workers within and across establishments," LISER Working Paper Series 2014-04, LISER.
    6. Cardoso, Ana Rute, 2006. "Wage mobility: do institutions make a difference?," Labour Economics, Elsevier, vol. 13(3), pages 387-404, June.
    7. Gustavo Britto, 2008. "Industrial productivity growth and localisation in Brazil: a firm level analysis," Anais do XXXVI Encontro Nacional de Economia [Proceedings of the 36th Brazilian Economics Meeting] 200807211548190, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
    8. Rabe-Hesketh, Sophia & Skrondal, Anders & Pickles, Andrew, 2005. "Maximum likelihood estimation of limited and discrete dependent variable models with nested random effects," Journal of Econometrics, Elsevier, vol. 128(2), pages 301-323, October.
    9. Sónia Torres & Pedro Portugal & John T. Addison & Paulo Guimarães, 2010. "The Sources of Wage Variation: An Analysis Using Matched Employer-Employee Data," Working Papers w201025, Banco de Portugal, Economics and Research Department.
    10. Bryce Stephens, 2005. "Wage Dispersion, Compensation Policy and the Role of Firms," Longitudinal Employer-Household Dynamics Technical Papers 2005-04, Center for Economic Studies, U.S. Census Bureau.
    11. Raposo, Pedro & Portugal, Pedro & Carneiro, Anabela, 2015. "Decomposing the Wage Losses of Displaced Workers: The Role of the Reallocation of Workers into Firms and Job Titles," IZA Discussion Papers 9220, Institute for the Study of Labor (IZA).
    12. Jean-Pascal Guironnet & Matthieu Bunel, 2011. "Earning Inequalities Between and Within Nests: A Multilevel Modeling Approach Applied to the Case of France," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201118, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    13. Cardoso, Ana Rute, 2004. "Wage Mobility: Do Institutions Make a Difference? A Replication Study Comparing Portugal and the UK," CEPR Discussion Papers 4355, C.E.P.R. Discussion Papers.
    14. Martin Srholec & Pavla ?í?alová, 2013. "Does the local milieu matter for innovation? Multilevel evidence from the Czech Republic," ERSA conference papers ersa13p540, European Regional Science Association.
    15. João Carlos Cerejeira da Silva, 2003. "Local Human Capital Externalities or Sorting? Evidence From a Displaced Workers Sample," NIPE Working Papers 9/2003, NIPE - Universidade do Minho.
    16. Stephan, Gesine & Gerlach, Knut, 2004. "Collective contracts, wages and wage dispersion in a multi-level model," IAB Discussion Paper 200406, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    17. Stephen Pudney & Nikolaos Theodoropoulos, 2006. "Firm-Specific Gender and Ethnicity Pay Differentials in Britain," University of Cyprus Working Papers in Economics 9-2006, University of Cyprus Department of Economics.
    18. Heinze, Anja, 2010. "Beyond the mean gender wage gap: Decomposition of differences in wage distributions using quantile regression," ZEW Discussion Papers 10-043, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

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