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Evidence On The Employer Size-Wage Premium From Worker-Establishment Matched Data

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Author Info
Kenneth R. Troske

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Abstract

In spite of the large and growing importance of the employer size-wage premium, previous attempts to account for this premium using observable worker or employer characteristics have had limited success. The problem is that, while most theoretical explanations for the size-wage premium are based on the matching of employers and employees, previous empirical work has relied on either worker surveys with little information about the employer, or establishment surveys with little information about the workers. In contrast, this study uses the newly created Worker-Establishment Characteristic Database, which contains linked employeremployee data for a large sample of U.S. manufacturing workers and establishments, to examine seven explanations for the employer size-wage premium. A number of the explanations can account for some of the observed cross-sectional variation in worker wages. However, none of the explanations can fully account for the employer size-wage premium. In the end there remains a large, significant, and unexplained premium paid to workers of large employers. © 1999 by the President and Fellows of Harvard College and the Massachusetts Institute of Technolog

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Publisher Info
Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 81 (1999)
Issue (Month): 1 (February)
Pages: 15-26
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Handle: RePEc:tpr:restat:v:81:y:1999:i:1:p:15-26

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Kenneth R Troske & William J Carrington, 1992. "Gender Segregation Small Firms," Working Papers 92-13, Center for Economic Studies, U.S. Census Bureau, revised May 1993. [Downloadable!]
  2. Walter Oi, 1983. "The Fixed Employment Costs of Specialized Labor," NBER Chapters, in: The Measurement of Labor Cost, pages 63-122 National Bureau of Economic Research, Inc. [Downloadable!]
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