EconPapers    
Economics at your fingertips  
 

Firm Productivity, Wages, and Sorting

Benjamin Lochner and Bastian Schulz

Journal of Labor Economics, 2024, vol. 42, issue 1, 85 - 119

Abstract: We study the link between firm productivity and the wages that firms pay. Guided by a search-matching model with large firms, worker and firm heterogeneity, and production complementarities, we infer firm productivity by estimating firm-level production functions. Using German data, we find that the most productive firms do not pay the highest wages. Worker transitions from high- to medium-productivity firms are on average associated with wage gains. Productivity sorting—that is, the sorting of high-ability workers into high-productivity firms—is less pronounced than the sorting into high-wage firms.

Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://dx.doi.org/10.1086/722564 (application/pdf)
http://dx.doi.org/10.1086/722564 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
Working Paper: Firm Productivity, Wages, and Sorting (2021) Downloads
Working Paper: Firm productivity, wages, and sorting (2020) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jlabec:doi:10.1086/722564

Access Statistics for this article

More articles in Journal of Labor Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().

 
Page updated 2025-03-22
Handle: RePEc:ucp:jlabec:doi:10.1086/722564