Firm Size and Wages in Italy: Evidence from Exogenous Job Displacements

24 Pages Posted: 24 Oct 2014

See all articles by Vincenzo Scoppa

Vincenzo Scoppa

Università degli Studi della Calabria - Department of Economics and Statistics

Date Written: December 2014

Abstract

We use longitudinal data based on administrative archives from 1985 to 2002 to estimate the relationship between wages and firm size in Italy. By controlling for individual fixed effects, we find that larger firms pay significantly higher wages, although the individual unmeasured ability component accounts for about one half of the uncovered size–wage premium. To reduce potential self‐selection problems arising from endogenous job changes, we focus on a sample of workers displaced by firm closures. By using this sample, we confirm that larger firms pay higher wages, in part for unmeasured workers' abilities and in part for firm size effects.

Suggested Citation

Scoppa, Vincenzo, Firm Size and Wages in Italy: Evidence from Exogenous Job Displacements (December 2014). The Manchester School, Vol. 82, Issue 6, pp. 677-700, 2014. Available at SSRN: https://ssrn.com/abstract=2514097 or http://dx.doi.org/10.1111/manc.12037

Vincenzo Scoppa (Contact Author)

Università degli Studi della Calabria - Department of Economics and Statistics ( email )

via Ponte Bucci
Arcavacata di Rende, Cosenza 87036
Italy

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