IDEAS home Printed from https://ideas.repec.org/p/bok/wpaper/1833.html
   My bibliography  Save this paper

The Sources of Firm Size-Wage Premium: Evidence from Employer-Employee Matched Data (in Korean)

Author

Listed:
  • Sang Yoon Song

    (Economic Research Institute, The Bank of Korea)

Abstract

Using the Korean employer-employee matched data over the period between 2007-2015, this paper analyzes the effects of characteristics of both employee and employer on firm-size wage premium, focusing on four factors: 1) worker characteristics, 2) worker composition within firms(or establishments), 3) wage differentials between contractors and subcontractors, and 4) performance pay and rent-sharing behaviors of employers. The main results are as follows. First, among the factors considered, the one that shows the biggest effects on size-wage premium is worker characteristics. In particular, the differences in the years of schooling and work experience between workers of small and larger establishments play critical roles in explaining size-wage premium. Secondly, among variables for worker composition, the differences in shares of highly educated workers and workers who join labor unions within establishments mainly account for size-wage premium. Thirdly, wage differentials between contractors and subcontractors also affect size-wage premium in the manufacturing sector. This is due to relatively high shares belonging to subcontractors among small firms and lower wages paid to workers of subcontractors. Fourthly, low performance pay and inactive rent-sharing behaviors of small manufacturing firms make size-wage premium larger. Lastly, size-wage premium affects workers¡¯ wages disproportionately according to wage levels: High-wage workers in large firms benefit more from their size-wage premiums compared to low-wage workers working for the same firms.

Suggested Citation

  • Sang Yoon Song, 2018. "The Sources of Firm Size-Wage Premium: Evidence from Employer-Employee Matched Data (in Korean)," Working Papers 2018-33, Economic Research Institute, Bank of Korea.
  • Handle: RePEc:bok:wpaper:1833
    as

    Download full text from publisher

    File URL: https://www.bok.or.kr/ucms/cmmn/file/fileDown.do?menuNo=500788&atchFileId=FILE_000000000006975&fileSn=1
    File Function: Working Paper, 2018
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Size-wage premiums; Employer-employee matched data; Subcontractor; Performance pay; Rent sharing;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bok:wpaper:1833. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Economic Research Institute (email available below). General contact details of provider: https://edirc.repec.org/data/imbokkr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.