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Establishment Wage Differentials

Author

Listed:
  • Lane, Julia I.

    (The National Opinion Research Center (NORC) and IZA)

  • Salmon, Laurie A.

    (U.S. Bureau of Labor Statistics)

  • Spletzer, James R.

    (U.S. Bureau of Labor Statistics)

Abstract

Economists have long known that individual wages depend on a combination of employee and employer characteristics, as well as the interaction of the two. Although it is important to understand how employee and employer characteristics are related to wages, little is known about the magnitude and relation of these wage effects. This is primarily due to the lack of microdata which links individuals to the establishments where they work, but also due to technical difficulties associated with separating out employee and employer effects. This paper uses data from the Occupational Employment Statistics program at the Bureau of Labor Statistics that permit both of these issues to be addressed. Our results show that employer effects contribute substantially to earnings differences across individuals. We also find that establishments that pay well for one occupation also pay well for others. This paper contributes to the growing literature that analyzes firms’ compensation policies, and specifically the topic of employer effects on wages.

Suggested Citation

  • Lane, Julia I. & Salmon, Laurie A. & Spletzer, James R., 2007. "Establishment Wage Differentials," Working Papers 403, U.S. Bureau of Labor Statistics.
  • Handle: RePEc:bls:wpaper:ec070020
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Antoni, Manfred & Janser, Markus & Lehmer, Florian, 2015. "The hidden winners of renewable energy promotion: Insights into sector-specific wage differentials," Energy Policy, Elsevier, vol. 86(C), pages 595-613.
    2. Haltiwanger, John C. & Lane, Julia I. & Spletzer, James R., 2007. "Wages, productivity, and the dynamic interaction of businesses and workers," Labour Economics, Elsevier, vol. 14(3), pages 575-602, June.
    3. Richard Duhautois & Fabrice Gilles & Héloïse Petit, 2009. "Worker flows, job flows and establishment wage differentials: Analysing the case of France," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00646440, HAL.
    4. Richard Duhautois & Fabrice Gilles & Héloïse Petit, 2012. "Worker flows and establishment wage differentials : a breakdown of the relationship," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00833872, HAL.
    5. DiPietro, William R., 2015. "Wages And Corporate Dominance," Ekonomika, Journal for Economic Theory and Practice and Social Issues, Society of Economists Ekonomika, Nis, Serbia, vol. 61(1), pages 1-8, March.
    6. Elizabeth Weber Handwerker & James R. Spletzer, 2016. "The Role of Establishments and the Concentration of Occupations in Wage Inequality," Research in Labor Economics, in: Lorenzo Cappellari & Solomon W. Polachek & Konstantinos Tatsiramos (ed.), Inequality: Causes and Consequences, volume 43, pages 167-193, Emerald Publishing Ltd.
    7. Erling Barth & James Davis & Richard B. Freeman, 2018. "Augmenting the Human Capital Earnings Equation with Measures of Where People Work," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 71-97.
    8. John M. Abowd & John Haltiwanger & Julia I. Lane & Kristin Sandusky, 2001. "Within and Between Firm Changes in Human Capital, Technology, and Productivity Preliminary and incomplete," Longitudinal Employer-Household Dynamics Technical Papers 2001-03, Center for Economic Studies, U.S. Census Bureau.
    9. Gabriela López Noria, 2011. "The Effect of Trade and FDI on Inter-industry Wage Differentials: The Case of Mexico," Working Papers 2011-10, Banco de México.
    10. William R. DiPietro, 2015. "Wages And Corporate Dominance," Ekonomika, Journal for Economic Theory and Practice and Social Issues 2015-01, „Ekonomika“ Society of Economists, Niš (Serbia).
    11. Scotton Carol R., 2013. "New risk rates, inter-industry differentials and the magnitude of VSL estimates," Journal of Benefit-Cost Analysis, De Gruyter, vol. 4(1), pages 39-80, March.

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    More about this item

    Keywords

    Establishment Wage Differentials; Occupational Employment Statistics;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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