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Work Characteristics, Firm Size and Wages

Author

Listed:
  • Christoph M. Schmidt

    (Princeton University)

  • Klaus F. Zimmerman

    (University of Munich)

Abstract

A positive wage-firm size relationship is well documented in the empirical literature in industrial organization and labor economics. Firm size seems to proxy various unobserved determinants such as job satisfaction, monitoring costs, more complex technologies and worker participation in monopoly profits. It is generally argued that, the greater the possibility of controlling for these latent factors, the less likely that a significant size effect will appear. This paper attempts to distinguish firm size from other wage determinants for a rich data source for West Germany and demonstrates the persistence of the size premium.

Suggested Citation

  • Christoph M. Schmidt & Klaus F. Zimmerman, 1990. "Work Characteristics, Firm Size and Wages," Working Papers 644, Princeton University, Department of Economics, Industrial Relations Section..
  • Handle: RePEc:pri:indrel:264
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    File URL: http://dataspace.princeton.edu/jspui/handle/88435/dsp01w95050452
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    Keywords

    firm size-wage differentials; earnings functions; compulsory wage differentials; work characteristics;

    JEL classification:

    • H19 - Public Economics - - Structure and Scope of Government - - - Other

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