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Title:Working in family firms: Less paid but more secure? Evidence from French matched employer-employee data PDF Logo
Authors:Bassanini, Andrea
Caroli, Eve
Rebérioux, Antoine
Breda, Thomas
Issue Date:2011
Series/Report no.:Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5842
Abstract:We study compensation packages in family and non-family firms. Using matched employer-employee data for a representative sample of French establishments, we first show that family firms pay on average lower wages to their workers. We find that part of this wage gap is due to differences in unobserved characteristics of workers across family and non-family firms. However, we also find evidence that company wage policies differ according to ownership status, so that workers staying in the same firm enjoy on average a 3% pay increase when a family firm becomes non-family owned and suffer a similar pay drop when the ownership transition occurs the other way round. In contrast, we find evidence that family firms are characterised by lower job insecurity, as measured by dismissal rates and by the subjective risk of dismissal perceived by workers. In addition, family firms appear to rely less on dismissals - and more on hiring reductions - than non-family firms when they downsize. We show that compensating wage differentials account for a substantial part of the inverse relationship between the family/non-family gaps in wages and job security.
Subjects:family firms
wages
job security
compensating wage differentials
linked employer-employee data
JEL:G34
J31
J33
J63
L26
Persistent Identifier of the first edition:urn:nbn:de:101:1-201107283654
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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