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Firm-Size Wage Differentials in the Netherlands

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  • Oosterbeek, Hessel
  • van Praag, Mirjam

Abstract

An unsolved problem in modern labor economics is the positive relation between the size of the firm in which a worker is employed and his wage. One line of research that has been developed quite recently in this field is the application of endogenous switching regression models. In this paper we utilize such a model to investigate firm-size wage differentials in the Netherlands. The principal findings are that larger firms pay higher returns on schooling whereas smaller firms tend to reward IQ. Combined with the finding that high IQ-workers are sorted into the largest firms, the results are consistent with a model of job screening. Furthermore, we find that employed sons of self-employed fathers are more likely to work in small firms and that wage prospects for all types of workers are indeed most favorable in larger firms. Copyright 1995 by Kluwer Academic Publishers

Suggested Citation

  • Oosterbeek, Hessel & van Praag, Mirjam, 1995. "Firm-Size Wage Differentials in the Netherlands," Small Business Economics, Springer, vol. 7(3), pages 173-182, June.
  • Handle: RePEc:kap:sbusec:v:7:y:1995:i:3:p:173-82
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    Cited by:

    1. Laia Castany & Enrique Lopez-Bazo & Rosina Moreno, 2007. "Decomposing differences in total factor productivity across firm size," IREA Working Papers 200705, University of Barcelona, Research Institute of Applied Economics, revised Mar 2007.
    2. Vieira, J.A.C. & Couto, J.P.A. & Tiago, M.T.B., 2006. "Inter-regional Wage Dispersion in Portugal," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 6(1).
    3. Lopez-Acevedo, Gladys & Tinajero, Monica & Rubio, Marcela, 2005. "Mexico : human capital effects on wages and productivity," Policy Research Working Paper Series 3791, The World Bank.
    4. C. Praag & Peter Versloot, 2007. "What is the value of entrepreneurship? A review of recent research," Small Business Economics, Springer, vol. 29(4), pages 351-382, December.
    5. José Ignacio Uribe & Carlos Humberto Ortiz & Gustavo Adolfo García, 2007. "La segmentación del mercado laboral colombiano en la década de los noventa," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 9(16), pages 189-221, January-J.
    6. Audretsch, David B. & van Leeuwen, George & Menkveld, Bert & Thurik, Roy, 2001. "Market dynamics in the Netherlands: Competition policy and the role of small firms," International Journal of Industrial Organization, Elsevier, vol. 19(5), pages 795-821, April.
    7. Kristina Nyström & Gulzat Zhetibaeva Elvung, 2015. "New Firms as Employers: The Wage Penalty for Voluntary and Involuntary Job Switchers," LABOUR, CEIS, vol. 29(4), pages 348-366, December.
    8. Carlos Humberto Ortiz & José Ignacio Uribe & Érika Raquel Badillo, 2009. "Segmentación inter e intrarregional en el mercado laboral urbano de Colombia, 2001-2006," Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 27(58), pages 194-231, Agosto.
    9. Lanfranchi, Joseph & Ohlsson, Henry & Skalli, Ali, 2002. "Compensating wage differentials and shift work preferences," Economics Letters, Elsevier, vol. 74(3), pages 393-398, February.
    10. Lopez-Acevedo, Gladys, 2002. "Technology and firm performance in Mexico," Policy Research Working Paper Series 2778, The World Bank.
    11. Gustavo Gonzalez Palomino, 2014. "Diferencias en los ingresos laborales en Colombia, 2001?2006: un análisis de descomposición de Oaxaca para los sectores formal e informal," REVISTA CIFE, UNIVERSIDAD SANTO TOMÁS, September.
    12. Yifan Zhang, . "Productivity Evolution of Chinese Large and Small Firms in the Era of Globalization," Chapters, Economic Research Institute for ASEAN and East Asia (ERIA).
    13. Lopez-Acevedo, Gladys, 2003. "Wages and productivity in Mexican manufacturing," Policy Research Working Paper Series 2964, The World Bank.
    14. S. Dobbelaere, 2003. "Ownership, Firm Size and Rent Sharing in a Transition Country," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/170, Ghent University, Faculty of Economics and Business Administration.
    15. Dobbelaere, Sabien, 2004. "Ownership, firm size and rent sharing in Bulgaria," Labour Economics, Elsevier, vol. 11(2), pages 165-189, April.

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