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CEP discussion paper

Does High Involvement Management Lead to Higher Pay?

Using nationally representative survey data for Finnish employees linked to register data on their wages and work histories we find wage effects of high involvement management (HIM) practices are generally positive and significant. However, employees with better wage and work histories are more likely to enter HIM jobs. The wage premium falls substantially having accounted for employees’ work histories suggesting that existing studies’ estimates are upwardly biased due to positive selection into HIM. Results do not differ significantly when using propensity score matching as opposed to standard regression techniques. The premium rises with the number of HIM practices and differs markedly across different types of HIM practice.

Alex Bryson, Petri Böckerman and Pekka Ilmakunnas

February 2011     Paper Number CEPDP1046

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This CEP discussion paper is published under the centre's Labour markets programme.