Ownership, Agency and Wages: An Examination in the Fast Food Industry
No 3334, NBER Working Papers from National Bureau of Economic Research, Inc
This paper estimates the difference in compensation between company-owned and franchisee-owned fast food restaurants. The contrast is of interest because contractual arrangements give managers of company-owned outlets less of an incentive to monitor and supervise employees. Estimates based on two data sets suggest that employee compensation is slightly greater at company-owned outlets than franchisee-owned outlets. The earnings gap is 9 percent for assistant and shift managers and 2 percent for full-time crew workers. Furthermore. the tenure-earnings profile is steeper at company-owned restaurants. These findings suggest that monitoring difficulties influence the timing and generosity of compensation.
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Published as The Quarterly Journal of Economics, 106, February 1991, pp. 75-102
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Working Paper: Ownership, Agency and Wages: An Examination of the Fast Food Industry (1987)
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Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:3334
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