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Evidence on the Employer Size-Wage Premium From Worker-Establishment Matched Data

Author

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  • Kenneth R. Troske

    (University of Missouri-Columbia)

Abstract
In spite of the large and growing importance of the employer size-wage premium, previous attempts to account for this premium using observable worker or employer characteristics have met with limited success. The problem is that, while most theoretical explanations for the size-wage premium are based on the matching of employers and employees, previous empirical work has relied on either worker surveys with little information about a worker's employer, or establishment surveys with little information about workers. In contrast, this study uses the newly created Worker-Establishment Characteristic Database, which contains linked employer-employee data for a large sample of U.S. manufacturing workers and establishments, to examine seven explanations for the employer size-wage premium. A number of the explanations can account for some of the observed cross-sectional variation in worker wages. However, none of the explanations can fully account for the employer size-wage premium. In the end there remains a large, significant, and unexplained premium paid to workers of large employers.

Suggested Citation

  • Kenneth R. Troske, 1998. "Evidence on the Employer Size-Wage Premium From Worker-Establishment Matched Data," Labor and Demography 9807001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpla:9807001
    Note: 34 pages (title page, abstract page, 22 numbered pages, 10 table pages), WordPerfect 8.0
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    References listed on IDEAS

    as
    1. William J. Carrington & Kenneth R. Troske, 1995. "Gender Segregation in Small Firms," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 503-533.
    2. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
    3. Walter Oi, 1983. "The Fixed Employment Costs of Specialized Labor," NBER Chapters, in: The Measurement of Labor Cost, pages 63-122, National Bureau of Economic Research, Inc.
    4. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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