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Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title Intra-firm Wage Dispersion and Firm Performance
Organization Unit
  • Rudolf Winter-Ebmer
  • Josef Zweimüller
  • English
Institution University of Zurich
Series Name Working paper series / Institute for Empirical Research in Economics
Number No. 8
ISSN 1424-0459
Date 1999
Abstract Text Personnel economics has put forward conflicting arguments concerning the impact of increased wage dispersion within a firm on the productivity of its workers. Besides giving more incentives, bigger wage differentials might also give rise to less co-operation and more politicking amongst workers resulting in worse outcomes. We try to shed light on these issues using panel data for Austrian firms. As indicators for firm performance we use standardised wages. For white-collar wages the following picture emerges: more dispersion leads to higher earnings up to some point where the relation changes its direction. For blue-collar wages we find a positive association between dispersion and standardised wages between firms, but no relation within firms over time.
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