Careers and Wages in Family Firms:Evidence from Matched Employer-Employee Data

Edoardo Di Porto, Marco Pagano, Vincenzo Pezone (), Raffaele Saggio (), Raffaele Saggio () and Fabiano Schivardi
Additional contact information
Vincenzo Pezone: Tilburg University
Raffaele Saggio: University of British Columbia and NBER, https://economics.ubc.ca/profile/raffaele-saggio/

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: We investigate compensation policies in family and non-family firms using a novel employer-employee matched dataset comprising nearly the universe of Italian incorporated firms and ownership information. Family firms pay significantly lower wages and offer slower and less rewarding careers. Differences in worker sorting account for half of the wage gap while productivity differences and compensating differentials explain little of the residual gap. The wage distribution in family firms is more compressed, with infrequent promotions. We rationalize this evidence with a model where family owners seek to maintain control, creating a Òglass ceilingÓ that limits their employeesÕ career progression.

Keywords: family firms; corporate control; wage; career; workers; human capital; productivity; management. (search for similar items in EconPapers)
JEL-codes: D22 D23 D24 G32 G34 J24 J31 J32 J62 M12 M51 M52 M54 (search for similar items in EconPapers)
Date: 2024-11-15
New Economics Papers: this item is included in nep-hrm
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Working Paper: Careers and Wages in Family Firms: Evidence from Matched Employer-Employee Data (2024)
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