Wage Setting in Multiproduct Firms

Jackie M.L. Chan, Michael Irlacher, Michael Koch and Luca Macedoni

No 11674, CESifo Working Paper Series from CESifo

Abstract: This paper reveals a new determinant of wage markdowns at the firm level, namely, the product scope. Using matched employer-employee data on Danish manufacturing firms, we document a negative elasticity between wages and firm scope, which is of a similar magnitude but opposite sign as the firm-size wage premium. We rationalize the wage discount using a theory where workers value the opportunity to switch product lines as an amenity. Multiproduct firms exercise their monopsony power to offer lower wages. Our findings have important implications for understanding labor market dynamics in times of rising concentration from the contribution of large multiproduct firms.

Keywords: multiproduct firms; monopsony power; wages; amenities; labor share (search for similar items in EconPapers)
JEL-codes: D21 F10 J31 J42 L25 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-com, nep-hrm, nep-ind and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp11674.pdf (application/pdf)

Related works:
Working Paper: Wage Setting in Multiproduct Firms (2025)
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:ces:ceswps:_11674

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().