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Firm Size, Technical Change And Wages In The Pork Sector, 1990 -2005

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Listed:
  • Yu, Li
  • Hurley, Terrance M.
  • Kliebenstein, James
  • Orazem, Peter

Abstract

Economists have long puzzled over the fact that large firms pay higher wages than small firms, even after controlling for worker's observed productive characteristics. One possible explanation has been that firm size is correlated with unobserved productive attributes which confound firm size with other productive characteristics. This study investigates the size-wage premium in the context of firms competing within a single market for a relatively homogeneous product: hogs. We pay particular attention to the matching process by which workers are linked to farms of different size and technology use, and whether the matching process may explain differences in wages across farms. The study relies on four surveys of employees on hog farms collected in 1990, 1995, 2000, and 2005. We find that there are large wage premia paid to workers on larger farms that persist over time. Although more educated and experienced workers are more likely to work on larger and more technologically advanced hog farms, the positive relationships between wages and both farm size and technology adoption remain large and statistically significant even after controlling for differences in observable worker attributes and in the observed sorting process of workers across farms.

Suggested Citation

  • Yu, Li & Hurley, Terrance M. & Kliebenstein, James & Orazem, Peter, 2008. "Firm Size, Technical Change And Wages In The Pork Sector, 1990 -2005," Staff General Research Papers Archive 12921, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:12921
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    References listed on IDEAS

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    1. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
    2. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Oxford University Press, vol. 64(4), pages 605-654.
    3. Oi, Walter Y. & Idson, Todd L., 1999. "Firm size and wages," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 33, pages 2165-2214 Elsevier.
    4. James Kliebenstein & Peter F. Orazem, 1999. "The Structure of Wages and Benefits in the U.S. Pork Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 144-163.
    5. Dunne, Timothy & Schmitz, James A, Jr, 1995. "Wages, Employment Structure and Employer Size-Wage Premia: Their Relationship to Advanced-Technology Usage at US Manufacturing Establishments," Economica, London School of Economics and Political Science, vol. 62(245), pages 89-107, February.
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    9. McBride, William D. & Key, Nigel D., 2003. "Economic And Structural Relationships In U.S. Hog Production," Agricultural Economics Reports 33971, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. William E. Even & David A. Macpherson, 2012. "Is Bigger Still Better? The Decline of the Wage Premium at Large Firms," Southern Economic Journal, Southern Economic Association, vol. 78(4), pages 1181-1201, April.
    2. Carrillo, Mario Renato, 2016. "Characteristics of hog producers and how those characteristics affect the rate of adoption of technologies used in the hog industry: Evidence from hog producers in the United States," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 236196, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    pork; technology; Hog Farms; Wages; Propensity Score; Size; Wage Premium;

    JEL classification:

    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General

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