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Working in Family Firms: Paid Less but More Secure? Evidence from French Matched Employer-Employee Data


  • Andrea Bassanini
  • Thomas Breda
  • Eve Caroli
  • Antoine Rebérioux


The authors study compensation packages in family-owned and nonfamily-owned firms. Using French matched employer-employee data, they first show that family firms pay on average lower wages. Part of this wage gap is attributable to low-wage workers sorting into family firms and high-wage workers sorting into nonfamily firms; however, they also find evidence that company wage policies differ according to ownership status, so that the same worker is paid differently under family and nonfamily firm ownership. In addition, family firms are characterized by lower job insecurity, as measured by lower dismissal rates. Family firms also appear to rely less on dismissals, and more on hiring reductions, than do nonfamily firms when they downsize. The authors show that compensating wage differentials account for a substantial part of the inverse relationship between the family/nonfamily gaps in wages and job security.

Suggested Citation

  • Andrea Bassanini & Thomas Breda & Eve Caroli & Antoine Rebérioux, 2013. "Working in Family Firms: Paid Less but More Secure? Evidence from French Matched Employer-Employee Data," ILR Review, Cornell University, ILR School, vol. 66(2), pages 433-466, April.
  • Handle: RePEc:sae:ilrrev:v:66:y:2013:i:2:p:433-466

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    Cited by:

    1. Andrew Ellul & Marco Pagano & Fabiano Schivardi, 2014. "Employment and Wage Insurance within Firms - Worldwide Evidence," EIEF Working Papers Series 1402, Einaudi Institute for Economics and Finance (EIEF), revised Sep 2017.
    2. repec:kap:jbuset:v:146:y:2017:i:3:d:10.1007_s10551-015-2937-1 is not listed on IDEAS
    3. repec:eee:jbrese:v:84:y:2018:i:c:p:337-348 is not listed on IDEAS
    4. repec:krk:eberjl:v:5:y:2017:i:2:p:159-176 is not listed on IDEAS
    5. Block, Jörn H. & Fisch, Christian O. & Lau, James & Obschonka, Martin & Presse, André, 2016. "Who prefers working in family firms? An exploratory study of individuals’ organizational preferences across 40 countries," Journal of Family Business Strategy, Elsevier, vol. 7(2), pages 65-74.
    6. repec:kap:sbusec:v:50:y:2018:i:1:d:10.1007_s11187-017-9884-4 is not listed on IDEAS
    7. repec:krk:eberjl:v:5:y:2017:i:2:p:177-193 is not listed on IDEAS
    8. Bjuggren, Carl Magnus, 2015. "Sensitivity to shocks and implicit employment protection in family firms," Journal of Economic Behavior & Organization, Elsevier, vol. 119(C), pages 18-31.

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