Insider Power in Wage Determination

Blanchflower, David G.; Oswald, Andrew J.; Garrett, Mario

doi:10.3386/w3179

Cited by 41 publications

(38 citation statements)

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“…See e. g. Blanchflower, Oswald and Garrett (1990) for the impact of internal profitability on pay in the U.K. Similar evidence for the U.S. is produced by Blanchflower, Oswald and Sanfey (1996).…”

mentioning

confidence: 62%

Intra-Firm Wage Dispersion and Firm Performance

Winter‐Ebmer¹,

Zweimüller²

1999

Kyklos

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Personnel economics has put forward conflicting arguments concerning the impact of increased wage dispersion within a firm on the productivity of its workers. Besides giving more incentives, bigger wage differentials might also give rise to less co-operation and more politicking amongst workers resulting in worse outcomes. We try to shed light on these issues using panel data for Austrian firms. As indicators for firm performance we use standardised wages. For white-collar wages the following picture emerges: more dispersion leads to higher earnings up to some point where the relation changes its direction. For blue-collar wages we find a positive association between dispersion and standardised wages between firms, but no relation within firms over time. ZusammenfassungIn der Arbeitsmarkttheorie werden gegensätzliche Ansätze über den Einfluß einer erhöhten Streuung der Löhne auf die Produktivität der Arbeiter eines Unternehmens diskutiert. Neben der Verstärkung von Karriere-Anreizen können größere Lohndifferentiale auch zu einer Verminderung der Kooperation sowie zu mehr "Politicking" innerhalb der Arbeiter führen, was die Ergebnisse verschlechtern kann. Wir versuchen in diese Fragestellungen etwas Licht zu bringen, indem wir Paneldaten für österreichische Firmen verwenden. Wir verwenden standardisierte Löhne als Indikator für die Firmenleistung. Für die Gehälter von Angestellten entsteht das folgende Bild: eine höhere Streuung führt zu höheren Löhnen bis zu einem Punkt, wo sich diese Relation umdreht. Was die Löhne der Arbeiter betrifft, so finden wir eine positive Beziehung zwischen der Streuung und den standardisierten Löhnen zwischen den Firmen, nicht aber innerhalb der Firmen über die Zeit. RésuméLa théorie économique du personnel propose des approches conflictuelles quant à l'impact, au sein d'une entreprise, d'un accroissement de la dispersion des salaires sur la productivité de ses employés. Outre le fait d'inciter à l'avancement, de plus grandes différences de salaires pourraient aussi mener à une moindre coopération et à plus de "politicking" entre les employés, provoquant ainsi des résultats plus mauvais. Nous essayons d'illustrer ces positions en utilisant un panel d'entreprises autrichiennes, les salaires standardisés servant d'indicateur de performance pour chaque firme. Concernant les salaires des cols blancs, on remarque qu'une plus grande dispersion conduit à des revenus plus élevés jusqu'à un point où cette relation s'inverse. Quant aux salaires des cols bleus, on note une association positive entre dispersion et salaires standardisés entre les firmes mais aucune relation au sein des firmes dans le temps.JEL: D 31, J 33, J 53

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confidence: 62%

Intra-Firm Wage Dispersion and Firm Performance

Winter‐Ebmer¹,

Zweimüller²

1999

Kyklos

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“…See for example the crosscountry study of industry wage differentials by Holmlund and Zetterberg (1991) and the establishment-level study by Blanchflower et al (1990). Both papers do suggest substantial insider wage gains.…”

Section: Empirical Literaturementioning

confidence: 99%

Better protected, better paid: Evidence on how employment protection affects wages

Wiel¹

2010

Labour Economics

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Better Protected, Better Paid: Evidence on How Employment Protection Affects Wages * This paper empirically establishes the effect of the employer's term of notice on the wage level of employees. The term of notice is defined as the period an employer has to notify workers in advance of their up-coming dismissal. The wages paid during this period are an important element of firing costs and hence employment protection. To find a causal effect, I exploit the exogenous change in the term of notice that resulted from the introduction of a new Dutch law in 1999. Strong evidence is found that a longer 'dormant' term of notice leads to higher wages. In my sample, an additional month of notice increases wages by three percent, ceteris paribus.

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“…For further discussion of the relationship between local unemployment and pay, see Blanchflower (1991), Blanchflower, Oswald, and Garrett (1990), and Blanchflower and Oswald (1990, 1994. Nore: Absolute value r-statistics in parentheses.…”

Section: Comparative Wage Gains To Trainingmentioning

confidence: 99%