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Working in family firms: less paid but more secure? Evidence from French matched employer-employee data

Listed author(s):
  • Andrea Bassanini
  • Eve Caroli
  • Antoine Rebérioux
  • Thomas Breda

We study compensation packages in family and non-family firms. Using French matched employer-employee data, we first show that family firms pay on average lower wages. We find that part of this wage gap is due to low wage workers sorting into family firms and high wage workers sorting into non-family firms. However, we also find evidence that company wage policies differ according to ownership status, so that the same worker is paid differently under family and non-family firm ownership. We also find evidence that family firms are characterised by lower job insecurity, as measured by dismissal rates and by the subjective risk of dismissal perceived by workers. In addition, family firms appear to rely less on dismissals – and more on hiring reductions – than non-family firms when they downsize. We show that compensating wage differentials account for a substantial part of the inverse relationship between the family/non-family gaps in wages and job security.

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File URL: http://economix.fr/pdf/dt/2011/WP_EcoX_2011-38.pdf
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Paper provided by University of Paris West - Nanterre la Défense, EconomiX in its series EconomiX Working Papers with number 2011-38.

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Length: 48 pages
Date of creation: 2011
Handle: RePEc:drm:wpaper:2011-38
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