Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/214741
Authors: 
Lochner, Benjamin
Seth, Stefan
Wolter, Stefanie
Year of Publication: 
2020
Series/Report no.: 
FAU Discussion Papers in Economics 02/2020
Abstract: 
We use an extensive, matched employer-employee dataset to analyze the employersize wage relation and its contribution to wage inequality in Germany. Applying models with additive fixed effects for workers and establishments, we document that the large firm wage premium, which has risen over 25 years, has only recently started to decrease. Our estimates show that the recent decline is due to a decrease in the variation of establishment-specific wage premiums both across establishment size groups and within. This decline together with decreasing worker segregation at small firms account for an overall reversal in the trend of increasing wage dispersion.
Subjects: 
firm size
wage inequality
wage premiums
fixed-effect wage models
firm andworker heterogeneity
JEL: 
J00
J21
J31
J40
Document Type: 
Working Paper

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