Firms and Wages: Evidence from Displaced Workers

Thomas Crossley ()

Canadian International Labour Network Working Papers from McMaster University

Abstract: I use a unique data set of Canadian displaced workers to measure the effects of firm of employment on wages. This data set has the advantage of consisting of a sample of workers changing jobs for reasons (product demand shifts or technological changes) that are largely orthogonal to their individual levels of “ability”. It is also drawn from a labor market with wage-setting institutions that are quite similar to the U.S. My main findings are that, even within narrowly-defined industries, there are economically large and statistically significant firm wage effects that cannot be accounted for by unobserved worker heterogeneity. For a number of reasons, including the evidence I present on tenure, these effects are not easily attributable to compensating differentials, thus suggesting a role for models in which job rents play a role.

Pages: 51 pages
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Related works:
Working Paper: Firms and Wages: Evidence from Displaced Workers (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:mcm:cilnwp:22

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