“…This stands in contrast to the well established fact that some (in particular, large) firms make significant investment in their workplace amenities. For instance, Ben (2016) notes that the list of workplace amenities offered by SAS include "a gymnasium, billiard hall, sauna, massages, hair salon, Olympic-size pool, and many other perks" (p. 166), whose provision is, of course, associated with costs. In our setting, amenity provision helps reducing firm-specific wages and thus the marginal costs the producer faces in the production process, complementing work by Helpman et al (2010) and Bustos (2011) who assume that firms can make an investment to improve the productivity of their workforce.…”