Arbeitspapier

The Importance of Firms in Wage Determination

Firms are central to many theories of the labor market. However, the extent to which firms affect wages has only recently been explored using matched employer-employee data. This paper investigates (i) the importance of firms in explaining wage differences across individuals and industries, and (ii) how the nature of interfirm mobility – job-to-job vs. jobunemployment- job – affects the relative importance of firms and workers in wage determination. Results indicate that (i) firms are much more important in explaining the variance of average wages across industries rather than individuals, and (ii) using job-to-job transitions reduces the importance of firm wage policies in explaining differences.

Language
Englisch

Bibliographic citation
Series: IZA Discussion Papers ; No. 1367

Classification
Wirtschaft
Wage Level and Structure; Wage Differentials
Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
Subject
interfirm mobility
wage determination
industry wage differentials
matched employer employee data
Lohnbildung
Vergütungssystem
Lohnstruktur
Arbeitsmobilität
Schätzung
Österreich

Event
Geistige Schöpfung
(who)
Gruetter, Max
Lalive, Rafael
Event
Veröffentlichung
(who)
Institute for the Study of Labor (IZA)
(where)
Bonn
(when)
2004

Handle
Last update
10.03.2025, 11:45 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Gruetter, Max
  • Lalive, Rafael
  • Institute for the Study of Labor (IZA)

Time of origin

  • 2004

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