The employer size-wage gap: Evidence for Britain

Brian G. M. Main, Barry Reilly

Research output: Contribution to journalArticlepeer-review

Abstract / Description of output

This paper presents estimates for the employer plant size-wage gap for Britain. Using an ordered probit model, selectively-corrected wage equations are estimated for three plant size categories. In a comparison between plants with more than 500 workers and those with less than 100, a wage gap estimate of over 17% is detected. The wage effects of unionization in plants with more than 500 workers is reported as insignificant. In contrast to evidence provided by Idson and Feaster (1990) for the US, no evidence of non-random sorting of workers across plant size is detected. Section 1 details the data-set to be employed in the analysis, paying particular attention to a number of the key variables used, such as employer size and unionization. Section 2 outlines the econometric model that deals with the problem of selectivity bias in the context of an ordinal latent dependent variable. Section 3 provides the empirical estimates, and section 4 offers some conclusions. 

Original languageEnglish
Pages (from-to)125-142
Number of pages18
JournalEconomica
Volume60
Issue number238
DOIs
Publication statusPublished - May 1993

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