The Employer Size-Wage Effect

Brown, Charles; Medoff, James L.

doi:10.3386/w2870

Cited by 442 publications

(410 citation statements)

References 23 publications

Supporting

Mentioning

352

Contrasting

Unclassified

Order By: Relevance

“…Although this hypothesis cannot be examined with this dataset, it is worth noting that in other research, traditional measures of human capital such as tenure and education have little incremental ability to predict wages after controlling for firm and occupation-specific factors, as we have done in this study. 20 More generally, these results echo past studies where individuallevel job characteristics that might proxy human capital have had limited success in "knocking out" what appear to be wage anomalies (e.g., Krueger and Summers [1988] on industry wage effects; Groshen [1991b] on establishment wage effects; and Brown and Medoff [1989] and Kruse [1992] on size-wage effects).…”

Section: Discussioncontrasting

confidence: 46%

Changes in managerial pay structures 1986-1992 and rising returns to skill

O’Shaughnessy¹

2001

Oxford Economic Papers

View full text Add to dashboard Cite

We examine the relationship between wages and skill requirements in a sample of over 50,000 managers in 39 companies between 1986 and 1992. The data include an unusually good measure of job requirements and skills that can proxy for human capital. We find that wage inequality increased both within and between firms from 1986 and 1992. Higher returns to our measure of skill accounts for most of the increasing inequality within firms. At the same time, our measure of skill does not explain much of the cross-sectional variance in average wages between employers, and changes in returns to skill do not explain any of the time series increase in between-firm variance over time. Finally, we find only weak evidence of any declines in the rigidity of internal wage structures of large employers.Acknowledgments: Helpful comments were received by Erica Groshen, Daniel Levine,

show abstract

Section: Discussioncontrasting

confidence: 46%

Changes in managerial pay structures 1986-1992 and rising returns to skill

O’Shaughnessy¹

2001

Oxford Economic Papers

View full text Add to dashboard Cite

show abstract

“…The union effects hypothesis suggests the FSWE may be due to higher rates of unionization in large firms and because large firms use wage premiums to stave off labor-organizing attempts (Hodson and Kaufman 1982). Prior research, however, has found mixed evidence on whether monopoly power and unionization effects are responsible for the FSWE (Brown and Medoff 1989;Even and Macpherson 2012).…”

Section: Discussionmentioning

confidence: 90%

Growing Apart: The Changing Firm-Size Wage Premium and Its Inequality Consequences

Cobb

Lin

2017

Organization Science

View full text Add to dashboard Cite

Wage inequality in the United States has risen dramatically over the past few decades, prompting scholars to develop a number of theoretical accounts for the upward trend. This study argues that large firms have been a prominent labor-market institution that mitigates inequality. By compensating their low-and middle-wage employees with a greater premium than their higher-wage counterparts, large U.S. firms reduced overall wage dispersion. Yet, broader changes to employment relations associated with the demise of internal labor markets and the emergence of alternative employment arrangements have undermined large firms' role as an equalizing institution. Using data from the Current Population Survey and the Survey of Income and Program Participation, we find that in 1989, although all private-sector workers benefited from a firm-size wage premium, the premium was significantly higher for individuals at the lower end and middle of the wage distribution compared to those at the higher end. Between 1989 and 2014, the average firm-size wage premium declined markedly. The decline, however, was exclusive to those at the lower end and middle of the wage distribution, while there was no change for those at the higher end. As such, the uneven declines in the premium across the wage spectrum could account for about 20% of rising wage inequality during this period, suggesting that firms are of great importance to the study of rising inequality.Keywords firm-size wage premium, inequality, internal labor market, employment relationship Disciplines Management Sciences and Quantitative MethodsThis journal article is available at ScholarlyCommons:

show abstract

“…Several papers identify a 'firm size wage premium ' (e.g. Heyman 2007;Blien 2001;Brown/Hamilton/Medoff 1990;Brown/Medoff 1989). However, some studies (e.g.…”

Section: Establishment-level Wage Determinants and Structural Charactmentioning

confidence: 99%

The hidden winners of renewable energy promotion: Insights into sector-specific wage differentials

2015

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte.

show abstract

The Employer Size-Wage Effect

Cited by 442 publications

References 23 publications

Changes in managerial pay structures 1986-1992 and rising returns to skill

Changes in managerial pay structures 1986-1992 and rising returns to skill

Growing Apart: The Changing Firm-Size Wage Premium and Its Inequality Consequences

The hidden winners of renewable energy promotion: Insights into sector-specific wage differentials

Contact Info

Product

Resources

About