Chapter 33 Firm size and wages

Oi, Walter Y.; Idson, Todd L.

doi:10.1016/s1573-4463(99)30019-5

Cited by 420 publications

(353 citation statements)

References 48 publications

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“…There appears to be no wage effect of union membership whereas there is a positive wage premium associated with being insured against unemployment. There is also a significant firm size effect, which is consistently found in the literature (see, e.g., Oi and Idson (1999)). …”

Section: Resultssupporting

confidence: 79%

Specialization, outsourcing and wages

Munch

Skaksen

2009

Rev World Econ

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This paper studies the impact of outsourcing on individual wages. In contrast to the standard approach in the literature, we focus on domestic outsourcing as well as foreign outsourcing. We argue that if outsourcing is associated with specialization gains arising from an increase in the division of labor, domestic outsourcing tends to increase wages for both unskilled and skilled labor. We use a panel data set of workers in Danish manufacturing industries to show that domestic and foreign outsourcing affect wages as predicted.

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Section: Resultssupporting

confidence: 79%

Specialization, outsourcing and wages

Munch

Skaksen

2009

Rev World Econ

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“…The attention to firm size in studies of stratification has occurred, in part, because research on employment and compensation has consistently found that otherwise identical workers earn more when working for large firms. Empirical studies reveal, for example, that firms with 500 or more workers pay wages that are 30-to 50-percent higher than those of firms with fewer than 25 workers (for a review, see Oi and Idson 1999). Studies dating back to the turn of the 20th century have documented this empirical regularity in the United States (e.g., Moore 1911), and scholars have found evidence of the FSWE in diverse countries such as Canada (Lluis 2009), South Korea (Sun and Kim 2014), Spain (El-Attar and Lopez-Bazo n.d.), and Sweden (Fox 2009).…”

Section: Discussionmentioning

confidence: 99%

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

Cobb

Lin

2017

Organization Science

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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:

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“…Wages are found to fall in the beginning of a firm's life and increase later. As for job creation, there is also a large literature considering the relationship with firm size, and here it is generally found that small firms pay lower wages than large firms; see, e.g., Oi and Idson (1999).…”

Section: Introductionmentioning

confidence: 98%

Entrepreneurship, job creation and wage growth

2009

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This paper analyses the importance of entrepreneurs for job creation and wage growth. Relying on unique data that covers all plants, firms and individuals in the Danish private sector, we are able to distil a number of different measures of entrepreneurial plants from the set of new plants, including measures that much more precisely capture the "truly new" or "entrepreneurial" plants than in previous studies. Using these data, we find that while new plants in general account for one third of the gross job creation in the economy, entrepreneurial plants are responsible for between 15% and 25% of this, and thus only account for up to 8% of total gross job creation in the economy. However, entrepreneurial plants seem to generate more additional jobs than other new plants in the years following entry. Finally, the jobs generated by entrepreneurial plants are to a large extent low-wage jobs, as they are not found to contribute to the growth in average wages. However, this insight varies across the different types of entrepreneurial plants.

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Chapter 33 Firm size and wages

Cited by 420 publications

References 48 publications

Specialization, outsourcing and wages

Specialization, outsourcing and wages

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

Entrepreneurship, job creation and wage growth

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