Wage dispersion and firm performance: evidence from Kazakhstan

Dinara Alpysbayeva, Jozef Konings, Venkat Subramanian and Aigerim Yergabulova
Additional contact information
Venkat Subramanian: Nazarbayev University, Graduate School of Business
Aigerim Yergabulova: Nazarbayev University, Graduate School of Business

No 2022/01, Working Papers from Nazarbayev University, Graduate School of Business

Abstract: This paper studies within-firm pay inequality and its impact on firm performance in Kazakhstan. We measure within-firm pay inequality as the wage differential between the top- and the bottom-level job occupations. First, we report that wage inequality is higher in larger firms. This finding is consistent with the theories of differentiated pay schemes and the scope of control. Further, we explore to what extent a rise in firm inequality affects firm performance. Although a higher wage dispersion may serve as a signal to attract more productive or talented workers, we find no evidence to support the idea that incentive-based pay can boost overall firm performance. The negative impact points to rent extraction by top job occupations.

Keywords: Pay inequality; Job occupations; Performance; Firm size (search for similar items in EconPapers)
JEL-codes: J31 L25 M52 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2022-03
New Economics Papers: this item is included in nep-ban, nep-bec, nep-cfn, nep-cis, nep-lma and nep-sbm
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Journal Article: Wage dispersion and firm performance: evidence from Kazakhstan (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:asx:nugsbw:2022-01

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