TY - UNPB

T1 - Intra-firm wage inequality and firm performance

T2 - fist evidence from German linked employer-employee-data

AU - Braakmann, Nils

N1 - Literaturverz. S. 19 - 21

PY - 2008

Y1 - 2008

N2 - Economic theory suggests both positive and negative relationships between intrafirm wage inequality and productivity. This paper contributes to the growing empirical literature on this subject. We combine German employer-employee-data for the years 1995-2005 with inequality measures using the whole wage distribution of a firm and rely on dynamic panel-data estimators to control for unobserved heterogeneity, simultaneity problems and possible state dependence. Our results indicate a relative minor influence of intra-firm wage inequality on firm productivity. If anything, they provide some support for a view suggesting that some inequality may be beneficial, while too much leads to a detrimental effect on productivity.

AB - Economic theory suggests both positive and negative relationships between intrafirm wage inequality and productivity. This paper contributes to the growing empirical literature on this subject. We combine German employer-employee-data for the years 1995-2005 with inequality measures using the whole wage distribution of a firm and rely on dynamic panel-data estimators to control for unobserved heterogeneity, simultaneity problems and possible state dependence. Our results indicate a relative minor influence of intra-firm wage inequality on firm productivity. If anything, they provide some support for a view suggesting that some inequality may be beneficial, while too much leads to a detrimental effect on productivity.

KW - Commercial law

KW - wage dispersion

KW - labor productivity

M3 - Working papers

T3 - Working paper series in economics

BT - Intra-firm wage inequality and firm performance

PB - Institut für Volkswirtschaftslehre der Universität Lüneburg

CY - Lüneburg

ER -