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Dispersion in wage premiums and firm performance

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  • Martins, Pedro S.

Abstract

Using matched employer-employee panel data, we estimate measures of pay dispersion per firm-year that take into account both firm and worker unobserved heterogeneity. Unlike research that controls only for differences in observables, we find that within-firm pay inequality is significantly associated to lower firm performance.

Suggested Citation

  • Martins, Pedro S., 2008. "Dispersion in wage premiums and firm performance," Economics Letters, Elsevier, vol. 101(1), pages 63-65, October.
    • Handle: RePEc:eee:ecolet:v:101:y:2008:i:1:p:63-65
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    More about this item

    Keywords

    Wage policies Worker heterogeneity Fairness;

    JEL classification:

    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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