18 Pages Posted: 3 Jun 2012
Date Written: June 2012
This study attempts to clarify the nature of the employer size–wage effect in Australia by determining the extent to which it can be explained by observed and unobserved quality differences of workers. Our empirical results show that, for men, quality‐adjusted employer size–wage effects are quite small and are mostly driven by lower wages for workers in the smallest firms (fewer than 20 workers). For women, size–wage effects disappear when unobserved quality differences are accounted for. We also find that accounting for differences in the incidence of job training has no effect on the structure of wage differences by employer size.
Suggested Citation: Suggested Citation
Cai, Lixin and Waddoups, C. Jeffrey, Unobserved Heterogeneity, Job Training and the Employer Size – Wage Effect in Australia (June 2012). Australian Economic Review, Vol. 45, Issue 2, pp. 158-175, 2012. Available at SSRN: https://ssrn.com/abstract=2073088 or http://dx.doi.org/10.1111/j.1467-8462.2012.00680.x
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