Employer size-wage effects: evidence from matched employer-employee survey data in the UK

Authors: Belfield, Clive R.1; Wei, Xiangdong2

Source: Applied Economics, Volume 36, Number 3, February 20, 2004 , pp. 185-193(9)

Publisher: Routledge, part of the Taylor & Francis Group

Buy & download fulltext article:

OR

Price: $54.28 plus tax (Refund Policy)

Abstract:

This paper employs a random sample of matched employer-employee data from the UK to test seven possible explanations for the positive relationship between employer size and pay. Individual wage equations show a large employer size-wage premium. We then control for a range of establishment-level variables, based on seven hypotheses typically advanced to explain this premium. Each establishment-level factor reduces the wage premium, but a sizeable premium nonetheless remains. In adjudicating on these hypotheses, we find a strong association between the internal labour market and the employer size-wage premium. This finding supports the theory that the employer size-wage effect may be due to the higher costs of turnover or monitoring in larger firms. However, we find contrasting effects for public versus private sector establishments.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/0003684042000175316

Affiliations: 1: Teachers College Columbia University 525 W. 120th St New York NY 10027 USA 2: Department of Economics Lingnan University 8 Castle Peak Road Tuen Mun Hong Kong SAR PR China

Publication date: February 1, 2004

More about this publication?
Related content

Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content

Text size:

A | A | A | A
Share this item with others: These icons link to social bookmarking sites where readers can share and discover new web pages. print icon Print this page