Wage Structure, Raises and Mobility: International Comparisons of the Structure of Wages Within and Across Firms
The returns to talent or performance have grown over time in developed countries. Is talent concentrated in a few firms or are firms virtual microcosms of the economy, each having close to identical distributions of talent? The data show that talent is not concentrated in a few companies, but is widely dispersed across companies. Wage dispersion within firms is nearly as high as the wage dispersion overall. The standard deviation of wages within the firm is about 80% of the standard deviation across all workers in the economy. Firms are more similar than they are dissimilar, but they are not identical: the firm mean wage displays considerable dispersion across the population of firms. There is evidence that talent is becoming more concentrated over time within some firms relative to others. In four countries that estimated wage regressions with firm fixed effects, the firm fixed effects are contributing more to the R-squared of the wage regression over time. Law firms have more lawyers than janitors. Janitorial firms have more janitors than lawyers and the differences between firms have become more pronounced. Still, the variance of wages within the average firms remains high.
What people are saying - Write a review
We haven't found any reviews in the usual places.
average wage Bengt Holmstrom blue collar calculated Collar-1974 Sweden-Oy-Blue Collar-1974 Sweden-Oy-White Collar-1981 Norway-White compressed wages consumer price index countries data sets Denmark deviation of wages differ across firms dispersion within firms earnings economy employees entry rates Eric Maskin exit rates Figure 1A Figure IB firm fixed effects firms differ high wage firms human capital incentive pay Italian Liras labor market log wages Figure Manufacturing-1993 Norway-Heavy Manufacturing-1997 mean wages Mobility Norway Norway-Heavy Manufacturing-1987 Norway-Heavy Manufacturing-1993 Norway-Heavy Norway-White Collar-1986 Norway-White Collar-1986 Norway-White Norway-White Collar-1993 Norway-White Collar-1993 Norway-White Norway-White Collar-1997 Sweden-Oy-White occupation pay compression percentile positive correlation sample standard deviation structure of wages Sweden Sweden-Oy-Blue Collar-1974 Sweden-Oy-Blue Collar-1982 Sweden-Oy-Blue Sweden-Oy-White Collar-1982 Sweden-Oy-White Sweden-Oy-White Collar-1990 Sweden-Oy-Blue tenure workers tournament theory tournaments United States 1993 variance of wages variation in wages wage change wage dispersion wage distribution wage growth rates wage levels wage setting wage structure wage variance wages across firms wages within firms