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Internal wage dispersion and firm performance : white-collar evidence

Hunnes, Arngrim
Working paper
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URI
http://hdl.handle.net/11250/163270
Date
2006-05
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  • Discussion papers (SAM) [586]
Abstract
Is internal wage dispersion good for firm productivity, or do internal wage differences

break the conception of fairness and cause counterproductive behavior among workers?

Contrary to previous empirical work that has found a positive relationship between internal

wage dispersion and firm performance, this paper shows that such a relationship

is not present using a unique linked employer–employee data set for white-collar workers

in Norway over the period from 1986 to 1997. In the analysis, several different wage

dispersion measures are used, of which two explicitly control for wage dispersion within

and between levels in the firm’s hierarchical organization. The analysis also distinguishes between dispersion in the fixed and variable parts of wages.
Publisher
Norwegian School of Economics and Business Administration. Department of Economics
Series
Discussion paper
2006:21

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