Which Wage Dispersion Matters to Firms' Performance?

Per Lundborg

No 12/2007, Working Paper Series from Stockholm University, Swedish Institute for Social Research

Abstract: Research on wage dispersion and firm performance focuses on intra-firm and inter firm effects irrespective of workers’ profession. We extend the analysis by considering dispersion within professions, within and across firms and within professions economy-wide. We find that the intra-firm dispersion of wages, which research so far has focused on, has limited effects on productivity compared to the economy-wide wage dispersion within the professions. As Swedish firms have differentiated wages among employees during the last 10-15 years also the economy-wide dispersion within professions has increased thus contributing considerably to the strong performance of the Swedish economy in the late 1990's.

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Pages: 16 pages
Date: 2007-11-30
New Economics Papers: this item is included in nep-bec and nep-lab
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