Establishment age and wages: evidence from German linked employer-employee data

Arnd Kölling, Claus Schnabel and Joachim Wagner ()

No 13, Discussion Papers from Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics

Abstract: Prominent reasons why people make more or less money in the labor market include personal characteristics of the employee (e.g., human capital), job characteristics, and characteristics of the employer (e.g., firm size). An emerging empirical literature suggests that one hitherto overlooked firm characteristic matters, too: Employers who are in business for a longer period of time tend to pay higher wages. Using a unique set of linked employer-employee data we present the first empirical evidence on this firm age - wage nexus for Germany. We find that older firms pay on average higher wages for workers with the same broadly defined degree of formal qualification. This firm age differential vanishes after controlling for further worker characteristics and other firm characteristics besides age; if anything, younger firms pay more ceteris paribus.

Keywords: Establishment age; wage; linked employer-employee data; Germany (search for similar items in EconPapers)
JEL-codes: J3 (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (23)

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Working Paper: Establishment Age and Wages: Evidence from German Linked Employer-Employee Data (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:faulre:13

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