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Firm Size Distributions and Cross-Country Labor Market Outcomes

Author

Listed:
  • Todd Schoellman

    (Arizona State University)

  • Jianyu Lu

    (University of Notre Dame)

  • Kevin Donovan

    (University of Notre Dame)

Abstract

It is well-known that developing countries have many fewer large firms and that this has important implications for productivity. In this paper we collect and harmonize labor force surveys from 17 countries at different stages of development to document complementary facts about how the firm size distribution affects labor markets. Workers at large firms earn higher wages, have longer tenures, and enjoy more persistent employment in all countries. The firm size distribution accounts for a moderate fraction of cross-country variation in wages, tenure, and labor market churn. Viewed through the lens of a model of labor market churn, these facts jointly suggest that large firms provide better matches and that poor country labor markets suffer as a result of the missing large firms.

Suggested Citation

  • Todd Schoellman & Jianyu Lu & Kevin Donovan, 2017. "Firm Size Distributions and Cross-Country Labor Market Outcomes," 2017 Meeting Papers 1571, Society for Economic Dynamics.
    • Handle: RePEc:red:sed017:1571
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    References listed on IDEAS

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    Cited by:

    1. Christian Saborowski & Florian Misch, 2019. "Firm Size, Life Cycle Dynamics and Growth Constraints: Evidence from Mexico," IMF Working Papers 2019/087, International Monetary Fund.

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