The productivity-wage premium: Does size still matter in a service economy?

Giuseppe Berlingieri, Sara Calligaris and Chiara Criscuolo
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Sara Calligaris: OECD

No 2018/13, OECD Science, Technology and Industry Working Papers from OECD Publishing

Abstract: The literature has established two robust stylised facts: (i) the existence of a firm size-wage premium; and (ii) a positive relationship between firm size and productivity. However, the existing evidence is mainly based on manufacturing data only. With manufacturing nowadays accounting for a small share of the economy, whether productivity, size, and wages are closely linked, and how tight this link is across sectors, is still an open question. Using a unique micro-aggregated dataset covering the whole economy in 17 countries over 1994-2012, this paper compares these relationships across sectors. While the size-wage and size-productivity premia are significantly weaker in market services compared to manufacturing, the link between wages and productivity is stronger. The combination of these results suggests that, in a service economy the “size-wage premium” becomes more a “productivity-wage premium”. These results have first-order policy implications for both workers and firms.

Keywords: Productivity; Size-Premium; Wages (search for similar items in EconPapers)
JEL-codes: D2 E2 J3 (search for similar items in EconPapers)
Date: 2018-06-12
New Economics Papers: this item is included in nep-eff, nep-eur, nep-lma, nep-mac, nep-sbm and nep-ure
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Citations: View citations in EconPapers (28)

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https://doi.org/10.1787/04e36c29-en (text/html)

Related works:
Journal Article: The Productivity-Wage Premium: Does Size Still Matter in a Service Economy? (2018)
Working Paper: The productivity-wage premium: does size still matter in a service economy? (2018)
Working Paper: The productivity-wage premium: does size still matter in a service economy? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:oec:stiaaa:2018/13-en

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