The productivity-wage premium: does size still matter in a service economy?
Giuseppe Berlingieri, Sara Calligaris and Chiara Criscuolo
The literature has established two robust stylized facts: (i) the existence of a firm size-wage premium and (ii) a positive relationship between firm size and productivity. However, the existing evidence is mainly based on manufacturing, which nowadays accounts for a small share of the economy. Using a unique micro-aggregated dataset covering 17 countries over 1994?2012, this paper compares these relationships across sectors. While the size-wage and size-productivity premia are significantly weaker in market services compared to manufacturing, the link between wages and productivity is stronger. In a service economy the stylized fact is a "productivity-wage premium" rather than a "size-wage premium."
1 March 2018
AEA Papers and Proceedings 108, pp.328-33, 2018
This Journal article is published under the centre's Growth programme.