Do newly founded firms pay lower wages?: first evidence from Germany

Udo Brixy (), Susanne Kohaut and Claus Schnabel

No 200404, IAB-Discussion Paper from Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]

Abstract: "Using a linked employer-employee data set for Germany, this paper analyses wage setting in a cohort of newly founded and other establishments from 1997 to 2001. While theory provides alternative explanations for higher or lower wages in newly founded firms, we show empirically that start-ups tend to pay lower wages, ceteris paribus. On average, wages in newly founded establishments are 8 percent lower than in similar incumbent firms. This negative wage differential is substantially smaller in eastern than in western Germany. The wage differential is shown to decline over time as the newly founded firms become more mature." (Author's abstract, IAB-Doku) ((en))

Keywords: Bundesrepublik Deutschland; IAB-Linked-Employer-Employee-Datensatz; Lohnhöhe; Lohnstruktur; Unternehmensalter; Unternehmensgründung; 1997-2001 (search for similar items in EconPapers)
JEL-codes: D21 J30 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2004
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

Published in/as: Small Business Economics, Vol. 29, No. 1/2 (2007), S. 161-171, doi:10.1007/s11187-006-0015-x

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Related works:
Journal Article: Do Newly Founded Firms Pay Lower Wages? First Evidence from Germany (2007)
Working Paper: Do newly founded firms pay lower wages? First evidence from Germany (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:iab:iabdpa:200404

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