Pensions and Wage Premia

31 Pages Posted: 10 Jul 2007

See all articles by Edward B. Montgomery

Edward B. Montgomery

University of Maryland; National Bureau of Economic Research (NBER)

Kathryn L. Shaw

Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Date Written: February 1992

Abstract

In this paper we use that the theory of compensating differentials to identify sources of heterogeneity in firms' costs of providing fringe benefits and hence heterogeneity in the magnitude of the compensating differential. We estimate the relationship between pensions and wages controlling for variations in the size of the compensating differential related to firm size or the presence of a union. Both firm size and unionism are commonly associated with the payment of wage premia and/or the presence of market power where the costs of fringe benefits to the firm may be less. Our results are consistent with these a priori expectations and suggest that the magnitude of the compensating differential is significantly higher in nonunion and in small firms.

Suggested Citation

Montgomery, Edward B. and Shaw, Kathryn L., Pensions and Wage Premia (February 1992). NBER Working Paper No. w3985. Available at SSRN: https://ssrn.com/abstract=476140

Edward B. Montgomery (Contact Author)

University of Maryland ( email )

Department of Economics
College Park, MD 20742
United States
301-405-3498 (Phone)
301-405-3542 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Kathryn L. Shaw

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
19
Abstract Views
312
PlumX Metrics