Human Capital and Information: The Employer Size-Wage Effect

Kevin T. Reilly

109 citations0/0 files storedThe Journal of Human Resources

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Labor market dynamics and wage inequality Historical Economic and Social Studies Education and Labor Relations

Abstract

This paper examines the issue of the establishment size-wage effect. It analyzes a cross-section for the year 1979, with information on 607 individuals and the 60 private sector establishments where they work. It discusses four theories of the establishment size-wage effect and uses empirical proxies to test them. It shows that when a dummy variable on computer access in the establishment is introduced as a regressor, the establishment size variable is an insignificant regressor. This result and other evidence supports the contention that the establishment size coefficient captures the effect of unobserved human capital accumulation.

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References

1974Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition 1980Economics and Consumer Behavior 1984What do unions do 1986Random group effects and the precision of regression estimates 1993How Computers Have Changed the Wage Structure: Evidence from Microdata, 1984-1989 1989The Employer Size-Wage Effect 1987The Comparative Advantage of Educated Workers in Implementing New Technology 1985A Theory of Dual Labor Markets with Application to Industrial Policy, Discrimination and Keynesian Unemployment

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