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Managers and wage policies

We investigate the effects of individual top managers on wages and wage policies. A large longitudinal administrative dataset from Portugal allows us to match workers,firms and top managers, and follow the movements of the latter across different firms over time. We estimate the role of top manager fixed-effects in determining wages and wage policies, while also accounting for the effect of worker and firm heterogeneity. Our results reveal that top managers have a significant influence on wages, the returns to schooling and tenure, the gender wage gap, and the extent of rent sharing. Further-more, they point to the existence of managerial styles in the setting of wage policies. Finally, we relate worker compensation to observable managerial attributes, and find that returns to schooling tend to be higher in firms led by more educated top executives, while longer-tenured managers appear on average to engage in more rent sharing.

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Paper provided by NIPE - Universidade do Minho in its series NIPE Working Papers with number 2/2009.

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Date of creation: 2009
Date of revision:
Handle: RePEc:nip:nipewp:2/2009
Contact details of provider: Postal: Núcleo de Investigação em Políticas Económicas, Escola de Economia e Gestão, Universidade do Minho, P-4710-057 Braga, Portugal
Phone: +351-253604510 ext 5532
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  1. Antonio Afonso & Ricardo Sousa, 2011. "Assessing long-term fiscal developments: evidence from Portugal," Applied Economics Letters, Taylor & Francis Journals, vol. 18(1), pages 1-5.
  2. Fernando Alexandre & Pedro Bação & Vasco Gabriel, 2008. "Taylor-type rules versus optimal policy in a Markov-switching economy," GEMF Working Papers 2008-02, GEMF - Faculdade de Economia, Universidade de Coimbra.
  3. Cardoso, Ana Rute & Winter-Ebmer, Rudolf, 2007. "Mentoring and Segregation: Female-Led Firms and Gender Wage Policies," IZA Discussion Papers 3210, Institute for the Study of Labor (IZA).
  4. Bertrand, Marianne & Schoar, Antoinette, 2003. "Managing With Style: The Effect of Managers on Firm Policies," Working papers 4280-02, Massachusetts Institute of Technology (MIT), Sloan School of Management.
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  8. John M. Abowd & Francis Kramarz & David Margolis, 1999. "High Wage Workers and High Wage Firms," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00353892, HAL.
  9. John M. Abowd & Francis Kramarz & Sébastien Roux, 2006. "Wages, Mobility and Firm Performance: Advantages and Insights from Using Matched Worker-Firm Data," Economic Journal, Royal Economic Society, vol. 116(512), pages F245-F285, 06.
  10. Alexandre, Fernando & Portela, Miguel & Sá, Carla, 2008. "Admission Conditions and Graduates' Employability," IZA Discussion Papers 3530, Institute for the Study of Labor (IZA).
  11. Cardoso, Ana Rute, 2006. "Wage mobility: do institutions make a difference?," Labour Economics, Elsevier, vol. 13(3), pages 387-404, June.
  12. João Cerejeira Silva, 2008. "Young Employment, Job-Skill Composition and Minimum Wages: Evidence from a 'Natural Experiment'," NIPE Working Papers 04/2008, NIPE - Universidade do Minho.
  13. Brekke, Kurt Richard & Cellini, Roberto & Siciliani, Luigi & Straume, Odd Rune, 2008. "Competition and Quality in Regulated Markets: a Differential-Game Approach," CEPR Discussion Papers 6801, C.E.P.R. Discussion Papers.
  14. Kurt R. Brekke & Luigi Siciliani & Odd Rune Straume, 2009. "Hospital Competition and Quality with Regulated Prices," CESifo Working Paper Series 2635, CESifo Group Munich.
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  16. Rosa-Branca Esteves, 2014. "Price Discrimination with Private and Imperfect Information," Scandinavian Journal of Economics, Wiley Blackwell, vol. 116(3), pages 766-796, 07.
  17. Amado, Cristina & Teräsvirta, Timo, 2008. "Modelling Conditional and Unconditional Heteroskedasticity with Smoothly Time-Varying Structure," SSE/EFI Working Paper Series in Economics and Finance 691, Stockholm School of Economics.
  18. Cuñat, Vicente & Guadalupe, Maria, 2006. "Globalization and the Provision of Incentives Inside the Firm," CEPR Discussion Papers 5950, C.E.P.R. Discussion Papers.
  19. Vasco J. Gabriel & Paul Levine & Christopher Spencer, 2008. "How forward-looking is the Fed? Direct estimates from a ‘Calvo-type’ rule," NIPE Working Papers 09/2008, NIPE - Universidade do Minho.
  20. Delfim Gomes Neto & Francisco José Veiga, 2008. "Financial globalization, convergence and growth," NIPE Working Papers 07/2008, NIPE - Universidade do Minho.
  21. Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2011. "Mergers and capital flight in unionised oligopolies: Is there scope for a "national champion" policy?," International Review of Economics & Finance, Elsevier, vol. 20(2), pages 325-341, April.
  22. Martyn Andrews & Thorsten Schank & Richard Upward, 2006. "Practical fixed-effects estimation methods for the three-way error-components model," Stata Journal, StataCorp LP, vol. 6(4), pages 461-481, December.
  23. Murphy, Kevin J., 1999. "Executive compensation," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 38, pages 2485-2563 Elsevier.
  24. Cornelissen, Thomas & Hübler, Olaf, 2007. "Unobserved Individual and Firm Heterogeneity in Wage and Tenure Functions: Evidence from German Linked Employer-Employee Data," IZA Discussion Papers 2741, Institute for the Study of Labor (IZA).
  25. Rosa Branca Esteves, 2008. "Price Discrimination with Partial Information: Does it pay off?," NIPE Working Papers 12/2008, NIPE - Universidade do Minho.
  26. Kevin J. Murphy & Ján Zábojník, 2004. "CEO Pay and Appointments: A Market-Based Explanation for Recent Trends," American Economic Review, American Economic Association, vol. 94(2), pages 192-196, May.
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