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The price of unobservables and the employer-size wage premium

João Cerejeira () and Paulo Guimaraes ()

Economics Letters, 2012, vol. 117, issue 3, 878-880

Abstract: This paper estimates the employer-size wage effect on returns to unobservable skills and measured human capital variables using a novel methodology that allows us to estimate a high number of interactions between unobserved effects and firm size. Our results show that in large firms, returns to ability tend to be smaller than in small firms.

Keywords: Firm size; Wages; Interacting fixed effects (search for similar items in EconPapers)
JEL-codes: D20 J21 J24 J31 (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1016/j.econlet.2012.06.042

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