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Firm Size And Wages In Italy: Evidence From Exogenous Job Displacements

  • Vincenzo Scoppa

    ()

    (Dipartimento di Economia e Statistica, Università della Calabria)

We use longitudinal data based on administrative archives from 1985 to 2002 to estimate the relationship between wages and firm size for Italy. Controlling for individual fixed effects we find that larger firms pay significantly higher wages, although the individual unmeasured ability component accounts for about one half of the uncovered size-wage premium. To reduce potential self-selection problems arising from endogenous job changes, we focus on a sample of workers displaced by plant closings. Using this sample, we confirm that larger firms pay higher wages in part for unmeasured workers’ abilities and in part for true size effects.

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File URL: http://www.ecostat.unical.it/RePEc/WorkingPapers/WP01_2012.pdf
File Function: First version, 2012-01
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Paper provided by Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica) in its series Working Papers with number 201201.

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Length: 16 pages
Date of creation: Jan 2012
Date of revision:
Handle: RePEc:clb:wpaper:201201
Contact details of provider: Postal: Università della Calabria, Dipartimento di Economia, Statistica e Finanza, Ponte Pietro Bucci, Cubo 0/C, I-87036 Arcavacata di Rende, CS, Italy
Phone: +39 0984 492413
Fax: +39 0984 492421
Web page: http://www.unical.it/portale/strutture/dipartimenti_240/disesf/
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  1. Mahmood Arai, 2003. "Wages, Profits, and Capital Intensity: Evidence from Matched Worker-Firm Data," Journal of Labor Economics, University of Chicago Press, vol. 21(3), pages 593-618, July.
  2. Roberto Pedace, 2010. "Firm Size-Wage Premiums: Using Employer Data to Unravel the Mystery," Journal of Economic Issues, M.E. Sharpe, Inc., vol. 44(1), pages 163-182, March.
  3. G. Sulis, 2007. "What Can Monopsony Explain of the Gender Wage Differential in Italy?," Working Paper CRENoS 200713, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  4. Ponzo, Michela, 2009. "On-the-job Search in Italian Labour Markets: An Empirical Analysis," MPRA Paper 15476, University Library of Munich, Germany.
  5. Hilderth, A.K. & Oswald, A.J., 1993. "Rent-Sharing and Wages: Evidence form Company and Establishment Panels," Economics Series Working Papers 99154, University of Oxford, Department of Economics.
  6. Thierry Lallemand & Robert Plasman & François Rycx, 2005. "The establishment-size wage premium: evidence from European countries," DULBEA Working Papers 05-07.RS, ULB -- Universite Libre de Bruxelles.
  7. John Gibson & Steven Stillman, 2009. "Why Do Big Firms Pay Higher Wages? Evidence from an International Database," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 213-218, February.
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