Canadian Jobs and Firm Size: Do Smaller Firms Pay Less?

Employer Size and the Structure of Wages: A Critical Survey

“…Their results show the existence of a significant 4. Morissette (1993) finds similar results for Canada. and positive firm-size wage premium, even after controlling for many individual characteristics and working conditions.…”

“…Traditional explanations suggest that large employers: i) hire more qualified workers, ii) compensate workers for bad working conditions, iii) have more market power and share their excess profits with their workers, iv) avoid or mimic unionisation, and v) substitute high monitoring costs with wage premia. Empirical papers offer only partial evidence for these traditional arguments (e.g., Brown and Medoff, 1989;Idson and Feaster, 1990;Schmidt and Zimmerman, 1991;Main and Reilly, 1993;Morissette, 1993;Lallemand et al, 2005a). As a result, alternative hypotheses have been recently developed.…”

Three essays on the influence of formal institutions on entrepreneurship.

“…New firms are typically small, and small firms typically pay lower wages than large firms (Brown & Medoff, 1989;Idson & Feaster, 1990;Morissette, 1993;Winter-Ebmer, 2001). Therefore, these fimls are likely to have a larger percentage of their workers earning the minimum wage, making high minimum wages more costly to these firms.…”

“…It has been observed that small firms typically pay lower wages than larger firms (Brown & Medoff, 1989;Idson & Feaster, 1990;Morissette, 1993;Winter-Ebmer, 2001). …”

“…Additionally, new firms are typically small, and small firms often pay their employees relatively low wages (Brown & Medoff, 1989;Idson & Feaster, 1990;Morissette, 1993;Winter-Ebmer,2001). Because small and new firms are likely to pay a larger percentage of their workers low wages, high minimum wages that increase the labor cost of lowwage workers may have a disproportionate impaet on these types of firms.…”