IDEAS home Printed from https://ideas.repec.org/p/crm/wpaper/25133.html
   My bibliography  Save this paper

Firms' Beliefs About Wage Setting

Author

Listed:
  • Antoine Bertheau
  • Christian Hoeck

Abstract

This paper provides new evidence on why similar workers receive different pay by linking administrative data to a large-scale, representative survey of Danish firms. We find that about 18 percent of firms hold inaccurate beliefs about their position in the wage distribution, with such misperceptions more common in smaller firms. Survey responses reveal that, by far, the primary motive for setting high wages is to retain and attract employees, consistent with wage-posting models. Differences in firm amenities, both positive and negative, also help explain pay variation across firms.

Suggested Citation

  • Antoine Bertheau & Christian Hoeck, 2025. "Firms' Beliefs About Wage Setting," RFBerlin Discussion Paper Series 25133, ROCKWOOL Foundation Berlin (RFBerlin).
    • Handle: RePEc:crm:wpaper:25133
    as

    Download full text from publisher

    File URL: https://www.rfberlin.com/wp-content/uploads/2025/11/25133.pdf
    Download Restriction: no
    ---><---

    More about this item

    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
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

    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:crm:wpaper:25133. 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: Moritz Lubczyk or Matthew Nibloe (email available below). General contact details of provider: https://edirc.repec.org/data/cmucluk.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.