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Promotion Policy and Firm Size

Ori Zax ()

Economics Bulletin, 2012, vol. 32, issue 4, 3347-3356

Abstract: In contrast to the predictions of conventional economic theory, it is well documented that similar workers receive wages positively correlated with the size of the firm employing them. To explain these findings we augment the Waldman (1984) framework by adding a size variable and construct a dynamic model of promotion and obtain an equilibrium with a positive correlation between firm size and wages.

Keywords: Firm size and wages; promotion decisions (search for similar items in EconPapers)
JEL-codes: J3 J5 (search for similar items in EconPapers)
Date: 2012-12-08
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