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Firm-Size Wage Gaps, Job Responsibility, and Hierarchical Matching

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  • Jeremy T. Fox

Abstract

I present the fact that wage gaps due to firm size increase with job responsibility. I use Swedish data to determine whether wage gaps increase with a direct measure of job responsibility, to compare the age patterns of the wage gaps for blue- and white-collar workers, and to compare wages by job responsibility and spans of control. With U.S. data, I compare supervisory to nonsupervisory occupations and find that wage gaps increase with job responsibility for most occupational ladders. This fact is consistent with hierarchical matching models in which the larger number of subordinates amplifies managerial talent. (c) 2009 by The University of Chicago.

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  • Jeremy T. Fox, 2009. "Firm-Size Wage Gaps, Job Responsibility, and Hierarchical Matching," Journal of Labor Economics, University of Chicago Press, vol. 27(1), pages 83-126, January.
  • Handle: RePEc:ucp:jlabec:v:27:y:2009:i:1:p:83-126
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    Cited by:

    1. Molina-Domene, Maria, 2018. "Specialization matters in the firm size-wage gap," LSE Research Online Documents on Economics 88696, London School of Economics and Political Science, LSE Library.
    2. Luis Garicano & Esteban Rossi-Hansberg, 2015. "Knowledge-Based Hierarchies: Using Organizations to Understand the Economy," Annual Review of Economics, Annual Reviews, vol. 7(1), pages 1-30, August.
    3. Brianna Cardiff-Hicks & Francine Lafontaine & Kathryn Shaw, 2015. "Do Large Modern Retailers Pay Premium Wages?," ILR Review, Cornell University, ILR School, vol. 68(3), pages 633-665, May.
    4. Feng, Shuaizhang, 2009. "Return to Training and Establishment Size: A Reexamination of the Size-Wage Puzzle," IZA Discussion Papers 4143, Institute for the Study of Labor (IZA).
    5. 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.
    6. Ola Bengtsson & John R. M. Hand, 2013. "Employee Compensation in Entrepreneurial Companies," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(2), pages 312-340, June.
    7. Friedhelm Pfeiffer & Nico Schulz, 2012. "Gregariousness, interactive jobs and wages," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 45(2), pages 147-159, July.
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    9. Bayer, Christian & Kuhn, Moritz, 2018. "Which Ladder to Climb? Wages of Workers by Job, Plant, and Education," IZA Discussion Papers 11827, Institute for the Study of Labor (IZA).
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    11. Colin Green & John S. Heywood & Nikolaos Theodoropoulos, 2017. "Employer size and supervisor earnings: Evidence from Britain," University of Cyprus Working Papers in Economics 04-2017, University of Cyprus Department of Economics.
    12. Gizem Akar & Binnur Balkan & Semih Tümen, 2013. "Overview of Firm-Size and Gender Pay Gaps in Turkey: The Role of Informal Employment," Ekonomi-tek - International Economics Journal, Turkish Economic Association, vol. 2(3), pages 1-21, September.
    13. Valerie Smeets, 2017. "Can firms oversee more workers with fewer managers?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 333-333, February.
    14. Hassink, Wolter & Russo, Giovanni, 2010. "The Glass Door: The Gender Composition of Newly-Hired Workers Across Hierarchical Job Levels," IZA Discussion Papers 4858, Institute for the Study of Labor (IZA).
    15. Maria Molina-Domene, 2018. "Specialization Matters in the Firm Size-Wage Gap," CEP Discussion Papers dp1545, Centre for Economic Performance, LSE.
    16. Akyol, Ali C. & Verwijmeren, Patrick, 2013. "Human capital costs, firm leverage, and unemployment rates," Journal of Financial Intermediation, Elsevier, vol. 22(3), pages 464-481.
    17. Christian Bayer & Moritz Kuhn, 2018. "Which Ladder to Climb? Wages of Workers by Job, Plant, and Education," CESifo Working Paper Series 7236, CESifo Group Munich.
    18. Valerie Smeets & Michael Waldman & Frederic Warzynski, 2013. "Performance, Career Dynamics, and Span of Control," Economics Working Papers 2013-02, Department of Economics and Business Economics, Aarhus University.
    19. Rui Baptista & Francisco Lima & Miguel Preto, 2013. "Entrepreneurial skills and workers’ wages in small firms," Small Business Economics, Springer, vol. 40(2), pages 309-323, February.
    20. Robertas Zubrickas, 2011. "Managerial accountability for payroll expense and firm-size wage effects," IEW - Working Papers 474, Institute for Empirical Research in Economics - University of Zurich.
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    22. repec:spr:eujhec:v:18:y:2017:i:6:d:10.1007_s10198-016-0818-x is not listed on IDEAS

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