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High-Wage Workers and High-Wage Firms

  • Abowd, J.M.
  • Kramarz, F.
  • Margolis, D.N.

We study a longitudinal sample of over one million French workers and over 500,000 employing firms. Real total annual compensation per worker is decomposed into components related to observable characteristics, worker heterogeneity, firm heterogeneity and residual variation. Except for the residual, all components may be correlated in an arbitrary fashion. At the level of the individual, we find that person-effects, especially those not related to observables like education, are a very important source of wage variation in France. Firm-effects, while important, are not as important as person-effects. At the level of firms, we find that enterprises that hire high-wage workers are more productive but not more profitable. They are also more capital and high-skilled employee intensive. Enterprises that pay higher wages, controlling for person-effects, are more productive and more profitable. They are also more capital intensive but are not more high-skilled labor intensive. We also find that person-effects explain 97% of inter-industry wage differentials. Nous étudions un échantillon de données longitudinales sur plus de un million de travailleurs français à l'emploi de plus de 500 000 entreprises. La rémunération annuelle totale par travailleur, en chiffres réels, est divisée en composantes reliées aux caractéristiques observables, à l'hétérogénéité des travailleurs, à l'hétérogénéité des entreprises et à la variation résiduelle. ¸ l'exception du résidu, toutes les composantes peuvent être corrélées de façon arbitraire. Sur le plan des travailleurs, nous trouvons que les effets individuels, notamment les effets reliés à des caractéristiques observables comme le niveau d'études, sont une source très importante de dispersion des salaires en France. Les effets propres à l'entreprise, même s'ils sont importants, ne sont pas aussi importants que les effets individuels. Sur le plan des entreprises, nous trouvons que les entreprises qui embauchent des travailleurs à salaire é

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Paper provided by Centre interuniversitaire de recherche en économie quantitative, CIREQ in its series Cahiers de recherche with number 9503.

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Length: 72 pages
Date of creation: 1995
Date of revision:
Handle: RePEc:mtl:montec:9503
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