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Title:The Importance of Firms in Wage Determination PDF Logo
Authors:Gruetter, Max
Lalive, Rafael
Issue Date:2004
Series/Report no.:IZA Discussion paper series 1367
Abstract:Firms are central to many theories of the labor market. However, the extent to which firms affect wages has only recently been explored using matched employer-employee data. This paper investigates (i) the importance of firms in explaining wage differences across individuals and industries, and (ii) how the nature of interfirm mobility – job-to-job vs. jobunemployment- job – affects the relative importance of firms and workers in wage determination. Results indicate that (i) firms are much more important in explaining the variance of average wages across industries rather than individuals, and (ii) using job-to-job transitions reduces the importance of firm wage policies in explaining differences.
Subjects:interfirm mobility
wage determination
industry wage differentials
matched employer employee data
JEL:J31
C23
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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