Effects of Wage Dispersion on Large Belgian Firms
Mahy, Benoît
Effects of Wage Dispersion on Large Belgian Firms - 2008.
55
This paper examines the impact of wage dispersion on firm performance, measured by value-added per worker, in large Belgian firms. Using matched employer-employee data for 2003, we compute a conditional indicator of wage dispersion following the Winter-Ebmer and Zweimüller’s (1999) methodology. Our results support the existence of a positive and hump-shaped relationship between wage dispersion and firm performance, even when controlling for worker and firm characteristics and addressing potential simultaneity problems. The comparison between estimated turning points and descriptive statistics of our sample also suggests that increasing wage dispersion might increase value-added per worker in Belgium, particularly among white-collar workers. This might be due to both greater monitoring costs and production – effort elasticity considerations. Classification JEL – J31, J32, M5.
Effects of Wage Dispersion on Large Belgian Firms - 2008.
55
This paper examines the impact of wage dispersion on firm performance, measured by value-added per worker, in large Belgian firms. Using matched employer-employee data for 2003, we compute a conditional indicator of wage dispersion following the Winter-Ebmer and Zweimüller’s (1999) methodology. Our results support the existence of a positive and hump-shaped relationship between wage dispersion and firm performance, even when controlling for worker and firm characteristics and addressing potential simultaneity problems. The comparison between estimated turning points and descriptive statistics of our sample also suggests that increasing wage dispersion might increase value-added per worker in Belgium, particularly among white-collar workers. This might be due to both greater monitoring costs and production – effort elasticity considerations. Classification JEL – J31, J32, M5.
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