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Estimating the employer size-wage premium in a panel data model with comparative advantage and non-random selection

João Cerejeira ()

No 6/2004, NIPE Working Papers from NIPE - Universidade do Minho

Abstract: This paper considers the estimation of the employer-size wage e?ect using a panel of employer-employee matched data. We test for the possibility of different returns to observable human capital variables as well as examine the role played by unmeasured skills in driving the allocation of workers across firms of di?erent sizes. Our results show that some of the observed skills; namely, education, age, and tenure have high returns in large firms, while the opposite is true for high skilled occupations and for the gender gap. On the other hand, the price of non-observed skills is reduced as firm size increases. This finding is consistent with explanations based on the premise that large employers have more difficulty monitoring workers, which therefore leads them to monitor less closely.

Keywords: firm size; wages; non-random selection. (search for similar items in EconPapers)
JEL-codes: D20 J21 J24 J31 (search for similar items in EconPapers)
Date: 2004
New Economics Papers: this item is included in nep-lab and nep-mic
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