Working in Family Firms: Paid Less But More Secure? Evidence from French Matched Employer-Employee Data

Posted: 26 Apr 2013

See all articles by Andrea Bassanini

Andrea Bassanini

Organization for Economic Co-Operation and Development (OECD); IZA Institute of Labor Economics

Thomas Breda

Banque de France

Eve Caroli

Université Paris Dauphine

Antoine Rebérioux

Independent

Date Written: April 1, 2013

Abstract

The authors study compensation packages in family-owned and nonfamily-owned firms. Using French matched employer-employee data, they first show that family firms pay on average lower wages. Part of this wage gap is attributable to low-wage workers sorting into family firms and high-wage workers sorting into nonfamily firms; however, they also find evidence that company wage policies differ according to ownership status, so that the same worker is paid differently under family and nonfamily firm ownership. In addition, family firms are characterized by lower job insecurity, as measured by lower dismissal rates. Family firms also appear to rely less on dismissals, and more on hiring reductions, than do nonfamily firms when they downsize. The authors show that compensating wage differentials account for a substantial part of the inverse relationship between the family/nonfamily gaps in wages and job security.

Keywords: family firms, wages, job security, compensating wage differentials, linked employer-employee data

JEL Classification: J3, J6

Suggested Citation

Bassanini, Andrea and Breda, Thomas and Caroli, Eve and Rebérioux, Antoine, Working in Family Firms: Paid Less But More Secure? Evidence from French Matched Employer-Employee Data (April 1, 2013). Industrial and Labor Relations Review, Vol. 66, No. 2, 2013. Available at SSRN: https://ssrn.com/abstract=2256663

Andrea Bassanini (Contact Author)

Organization for Economic Co-Operation and Development (OECD) ( email )

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IZA Institute of Labor Economics ( email )

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Thomas Breda

Banque de France ( email )

Paris
France

Eve Caroli

Université Paris Dauphine ( email )

Place du Maréchal de Lattre de Tassigny
75775 Paris Cedex 16
France

Antoine Rebérioux

Independent ( email )

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