Firm Size and Wages in Germany

Trends and Impacts of Mobility

authored by

Knut Gerlach, Olaf Hübler

Abstract

The analysis of firm-size wage differentials in Germany, using data from the German Socio-Economic Panel, firstly corroborates the finding that wages rise with firm-size and shows that the rank order of mean wages between firm-size classes is stable for the period 1984-1993. Secondly, the most important novel results are as follows: (i) wage differentials between firm-size classes increased during the period investigated after controlling for individual attributes and computing with deflated values; (ii) average levels of the qualification of employees have diverged noticeably between small and large firms; (iii) movers from small to larger firms have to accept wages below the average pay of incumbents with comparable attributes in the new firms: (iv) movers to smaller firms, however, retain a portion of their higher wages in larger firms; and (v) wage differentials between smaller and larger firms decline with increasing unemployment.

Organisation(s)

Faculty of Economics and Management

Type

Article

Journal

EMPIRICA

Volume

25

Pages

245-261

No. of pages

17

ISSN

0340-8744

Publication date

01.1998

Publication status

Published

Peer reviewed

Yes

ASJC Scopus subject areas

Geography, Planning and Development, Development

Sustainable Development Goals

SDG 8 - Decent Work and Economic Growth

Electronic version(s)

https://doi.org/10.1023/A:1006904430572 (Access: Closed)