Teamwork and Intra-Firm Wage Dispersion Among Blue-Collar Workers

Abstract

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Teams, wages and wage dispersion

“…The additional analysis continues to support the pattern of results that teams are associated with increased wages and reductions in wage dispersion. The wage results closely mimic previous work, yet the findings on dispersion may differ from previous work ( Jirjahn and Kraft, 2010;Bauer and Bender, 2001) for several reasons. First, it is possible that the UK simply differs from Germany.…”

“…Additionally, 54 percent of establishments use teams in which roles rotate among team members (Team Rotate). These types of teams would appear not to generate the type of dispersion confirmed by Jirjahn and Kraft (2010) because such teams require similar skills of all workers which could presumably be reflected in lower wage dispersion. Only 48 percent of establishments use teams that jointly decide how work is done (Team Joint).…”

“…Empirically, Jirjahn and Kraft (2010) show that teams are associated with increased differences in earnings among skilled and unskilled blue-collar workers within establishments. They argue teams arise when workers have specialized skills and so are associated with skill and earnings dispersion not captured by other measures available to the researcher.…”

“…Teams may allow specialization of highly inter-related tasks and this specialization can lead to increased dispersion ( Jirjahn and Kraft, 2010). Alternatively, teams may be most effective when wages are compressed creating more cohesion among workers (Lazear, 1989).…”

“…Larger establishments tend to have greater dispersion while unions compress the wage distribution (Freeman, 1982). Technological changes can lead to greater dispersion if changes are skill biased ( Jirjahn and Kraft, 2010). Generally, increases in training require increases in compensation.…”