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Firm‐provided social concerns – just another compensating wage differentials story?

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  • Iben Bolvig

Abstract

Purpose - To analyse two important effects of the level of social concern in the firm. First, the effect on the labour force composition, i.e. do particular types of concerns attract certain kinds of employees? Second, the effect on the wage level within the firm, i.e. do firm‐provided social concerns substitute for money wages, or are they provided as an additional compensation? Design/methodology/approach - Empirical analysis using a survey on more than 2,000 firms, linked to administrative data for each employee in the firms. Estimates wage equations using the IV approach to deal with endogeneity of the level of social concerns. Two competing theories aiming to explain the use of social concerns toward employees, the compensating wage differential theory and corporate social responsibility, are compared. Findings - Finds indications in favour of the compensating wage differential theory when looking at wage effects at the firm level, whereas looking at the target group level finds that white‐collar workers might experience higher levels of social concerns without having lower wages, which contrast the theory of compensating wage differentials. Originality/value - The paper compare two well‐established theories within two different disciplines – the compensating wage differential theory from economics, and CSR from management. This is done using solid empirical analysis.

Suggested Citation

  • Iben Bolvig, 2005. "Firm‐provided social concerns – just another compensating wage differentials story?," International Journal of Manpower, Emerald Group Publishing Limited, vol. 26(7/8), pages 673-704, October.
  • Handle: RePEc:eme:ijmpps:01437720510628130
    DOI: 10.1108/01437720510628130
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    Cited by:

    1. Oga, Yutaro & Ito, Kazuya & Takashima, Ryuta, 2024. "Sustainable investments in the face of social unrest and risk: A new perspective on corporate social responsibility," Economics Letters, Elsevier, vol. 236(C).
    2. Laszlo Goerke & Nora Paulus, 2024. "Collective Bargaining about Corporate Social Responsibility," IAAEU Discussion Papers 202401, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).

    More about this item

    Keywords

    Pay differentials; Social responsibility;

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