Flexible Work Systems and the Structure of Wages: Evidence …ftp.iza.org/dp353.pdf ·...

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IZA DP No. 353 Flexible Work Systems and the Structure of Wages: Evidence from Matched Employer- Employee Data Thomas K. Bauer Stefan Bender DISCUSSION PAPER SERIES Forschungsinstitut zur Zukunft der Arbeit Institute for the Study of Labor August 2001

Transcript of Flexible Work Systems and the Structure of Wages: Evidence …ftp.iza.org/dp353.pdf ·...

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IZA DP No. 353

Flexible Work Systems and the Structure ofWages: Evidence from Matched Employer-Employee DataThomas K. BauerStefan Bender

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Forschungsinstitutzur Zukunft der ArbeitInstitute for the Studyof Labor

August 2001

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Flexible Work Systems and the Structure of Wages: Evidence from Matched

Employer-Employee Data

Thomas K. Bauer IZA, Bonn,

University of Bonn and CEPR, London

Stefan Bender Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg

Discussion Paper No. 353 August 2001

(revised: July 2002)

IZA

P.O. Box 7240 D-53072 Bonn

Germany

Tel.: +49-228-3894-0 Fax: +49-228-3894-210

Email: [email protected]

This Discussion Paper is issued within the framework of IZA’s research area The Future of Labor. Any opinions expressed here are those of the author(s) and not those of the institute. Research disseminated by IZA may include views on policy, but the institute itself takes no institutional policy positions. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent, nonprofit limited liability company (Gesellschaft mit beschränkter Haftung) supported by the Deutsche Post AG. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. The current research program deals with (1) mobility and flexibility of labor markets, (2) internationalization of labor markets and European integration, (3) the welfare state and labor markets, (4) labor markets in transition, (5) the future of work, (6) project evaluation and (7) general labor economics. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character.

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IZA Discussion Paper No. 353 August 2001 (revised: July 2002)

ABSTRACT

Flexible Work Systems and the Structure of Wages: Evidence from Matched Employer-Employee Data�

A growing literature is concerned with the effects of flexible workplace systems or High Performance Work Organizations (HPWOs) on wages. This paper makes use of a new employer-employee-linked panel data set for Germany to examine the effects of adopting HPWOs on wages as well as on the wage structure within firms. The empirical results suggest that, depending on the particular practice, flexible workplace systems benefit employees through higher wages. HPWOs further increase within firm wage inequality through a relative increase in the wages at the upper parts of an establishment’s wage distribution. JEL Classification: L2, J3, O3 Keywords: organizational change, wages, linked-employer-employee data set, within-firm

inequality Thomas Bauer IZA P.O. Box 7240 53072 Bonn Germany Tel.: +49 228 3894 529 Fax: +49 228 3894 510 Email: [email protected]

� The authors would like to thank Uwe Bach, Hielke Buddelmeyer, Christian Dustmann, Ira Gang, David Jaeger, Arnd Kölling, Magnus Lofstrom, Christoph M. Schmidt, Steve Trejo, Petra Todd, Melanie Ward, Rainer Winkelmann, and Myeong-Su Yun, the participants of the IZA Research Seminar and the labor seminar at the University of Pompeu Fabra, as well as the participants of the IZA workshop “Organizational Change and Its Implications for the Labor Market", November 16-18, 2000, Bonn, the IZA workshop “Labor Market Analysis Using Matched Employer-Employee Data Sets", November 30 - December 1, 2000, Bonn, the 2001 CEPR/IZA conference “European Summer Symposium in Labour Economics", April 24-28, 2001, Buch am Ammersee, the 15th Annual Conference of the European Society for Population Economics, June 14 - June 16, Athens, the Annual Conference of EALE, September 13-16, 2001, Jyväskyla, the Annual Conference of the Verein für Socialpolitik, September 26-28, 2001, Magdeburg and CAED01, October 8-10, Aarhus, for helpful suggestions on earlier drafts of the paper. Parts of this paper have been written while Stefan Bender was visiting IZA.

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Page 41: Flexible Work Systems and the Structure of Wages: Evidence …ftp.iza.org/dp353.pdf · 2005-03-08 · Flexible Work Systems and the Structure of Wages: Evidence from Matched Employer-Employee

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280 P. Apps R. Rees

Household Saving and Full Consumption over the Life Cycle

7 04/01

281 G. Saint-Paul

Information Technology and the Knowledge Elites

5 04/01

282 J. Albrecht A. Björklund S. Vroman

Is There a Glass Ceiling in Sweden?

5 04/01

283 M. Hagedorn A. Kaul V. Reinthaler

Welfare Analysis in a Schumpeterian Growth Model with Capital

7 04/01

284 H. Rapoport A. Weiss

The Optimal Size for a Minority

1 04/01

285 J. Jerger C. Pohnke A. Spermann

Gut betreut in den Arbeitsmarkt? Eine mikroökonometrische Evaluation der Mannheimer Arbeitsvermittlungsagentur

5 04/01

286 M. Fertig C. M. Schmidt

First- and Second-Generation Migrants in Germany – What Do We Know and What Do People Think

1 04/01

287

P. Guggenberger A. Kaul M. Kolmar

Efficiency Properties of Labor Taxation in a Spatial Model of Restricted Labor Mobility

3 04/01

288

D. A. Cobb-Clark

Getting Ahead: The Determinants of and Payoffs to Internal Promotion for Young U.S. Men and Women

5 04/01

289

L. Cameron D. A. Cobb-Clark

Old-Age Support in Developing Countries: Labor Supply, Intergenerational Transfers and Living Arrangements

3 04/01

290 D. A. Cobb-Clark M. D. Connolly C. Worswick

The Job Search and Education Investments of Immigrant Families

1 04/01

291 R. T. Riphahn Cohort Effects in the Educational Attainment of Second Generation Immigrants in Germany: An Analysis of Census Data

1 05/01

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292 E. Wasmer Between-group Competition in the Labor Market and the Rising Returns to Skill: US and France 1964-2000

5 05/01

293 D. Cobb-Clark T. F. Crossley

Gender, Comparative Advantage and Labor Market Activity in Immigrant Families

1 05/01

294 Š. Jurajda Estimating the Effect of Unemployment Insurance Compensation on the Labor Market Histories of Displaced Workers

3 05/01

295 F. Duffy P. P. Walsh

Individual Pay and Outside Options: Evidence from the Polish Labour Force Survey

4 05/01

296 H. S. Nielsen M. Rosholm N. Smith L. Husted

Intergenerational Transmissions and the School-to-Work Transition of 2nd Generation Immigrants

1 05/01

297 J. C. van Ours J. Veenman

The Educational Attainment of Second Generation Immigrants in The Netherlands

1 05/01

298 P. Telhado Pereira P. Silva Martins

Returns to Education and Wage Equations 5 06/01

299 G. Brunello C. Lucifora R. Winter-Ebmer

The Wage Expectations of European College Students

5 06/01

300 A. Stutzer R. Lalive

The Role of Social Work Norms in Job Searching and Subjective Well-Being

5 06/01

301

J. R. Frick G. G. Wagner

Economic and Social Perspectives of Immigrant Children in Germany

1 06/01

302

G. S. Epstein A. Weiss

A Theory of Immigration Amnesties

1 06/01

303

G. A. Pfann B. F. Blumberg

Social Capital and the Uncertainty Reduction of Self-Employment

5 06/01

304

P. Cahuc E. Wasmer

Labour Market Efficiency, Wages and Employ-ment when Search Frictions Interact with Intra-firm Bargaining

2 06/01

305

H. Bonin

Fiskalische Effekte der Zuwanderung nach Deutschland: Eine Generationenbilanz

1 06/01

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306

H. Bonin G. Abío E. Berenguer J. Gil C. Patxot

Is the Deficit under Control? A Generational Accounting Perspective on Fiscal Policy and Labour Market Trends in Spain

2 06/01

307

G. A. Pfann

Downsizing

1/5 06/01

308

G. A. Pfann D. S. Hamermesh

Two-Sided Learning, Labor Turnover and Worker Displacement

1 06/01

309

G. Brunello On the Complementarity between Education and Training in Europe

5 06/01

310

U. Sunde Human Capital Accumulation, Education and Earnings Inequality

5 06/01

311

G. Brunello Unemployment, Education and Earnings Growth

3 06/01

312

C. Furnée M. Kemler G. A. Pfann

The Value of Pain Relief

5 06/01

313

A. Ferrer-i-Carbonell B. M.S. van Praag

The Subjective Costs of Health Losses due to Chronic Diseases: An Alternative Model for Monetary Appraisal

7 06/01

314

B. M.S. van Praag A. Ferrer-i-Carbonell

Age-Differentiated QALY Losses

7 06/01

315

W. H. J. Hassink R. Schettkat

On Price-Setting for Identical Products in Markets without Formal Trade Barriers

7 06/01

316

M. Frondel C. M. Schmidt

Rejecting Capital-Skill Complementarity at all Costs

5 06/01

317

R. Winkelmann

Health Care Reform and the Number of Doctor Visits – An Econometric Analysis

7 06/01

318

M. Pannenberg G. G. Wagner

Overtime Work, Overtime Compensation and the Distribution of Economic Well-Being: Evidence for West Germany and Great Britain

1 06/01

319

R. Euwals R. Winkelmann

Why do Firms Train? Empirical Evidence on the First Labour Market Outcomes of Graduated Apprentices

1 06/01

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320

R. Fahr U. Sunde

Strategic Hiring Behavior in Empirical Matching Functions

1 06/01

321

P. Telhado Pereira P. Silva Martins

Is there a Return – Risk Link in Education?

5 07/01

322

O. Hübler U. Jirjahn

Works Councils and Collective Bargaining in Germany: The Impact on Productivity and Wages

1 07/01

323

A. Frederiksen E. K. Graversen N. Smith

Overtime Work, Dual Job Holding and Taxation

1 07/01

324

M. Pflüger

Trade, Technology and Labour Markets: Empirical Controversies in the Light of the Jones Model

2 07/01

325

R. A. Hart J. R. Malley U. Woitek

Real Wages and the Cycle: The View from the Frequency Domain

1 07/01

326

J. S. Earle Á. Telegdy

Privatization and Productivity in Romanian Industry: Evidence from a Comprehensive Enterprise Panel

4 07/01

327

H. Gersbach A. Schmutzler

A Product Market Theory of Training and Turnover in Firms

5 07/01

328

F. Breyer Why Funding is not a Solution to the “Social Security Crisis”

3 07/01

329

X. Gong A. van Soest

Wage Differentials and Mobility in the Urban Labor Market: A Panel Data Analysis for Mexico

1 07/01

330

D. N. Margolis K. G. Salvanes

Do Firms Really Share Rents with Their Workers?

5 07/01

331

R. Winkelmann

Why Do Firms Recruit Internationally? Results from the IZA International Employer Survey 2000

5 07/01

332

M. Rosholm An Analysis of the Processes of Labour Market Exclusion and (Re-) Inclusion

3 07/01

333

W. Arulampalam R. A. Naylor J. P. Smith

A Hazard Model of the Probability of Medical School Dropout in the United Kingdom

5 07/01

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334

P. A. Puhani �

Wage Rigidities in Western Germany? Microeconometric Evidence from the 1990s

1 07/01

335

R. Fahr U. Sunde �

Disaggregate Matching Functions

1 07/01

336

F. Lima P. Telhado Pereira �

Careers and Wage Growth within Large Firms 5 07/01

337 F. Büchel M. Pollmann-Schult �

Overeducation and Skill Endowments: The Role of School Achievement and Vocational Training Quality

5 08/01

338 C. Bell H. Gersbach �

Child Labor and the Education of a Society

5 08/01

339 A. Ibourk B. Maillard S. Perelman H. R. Sneessens �

The Matching Efficiency of Regional Labour Markets: A Stochastic Production Frontier Estimation, France 1990-1995

1 08/01

340 X. Wauthy Y. Zenou

How Does Imperfect Competition in the Labor Market Affect Unemployment Policies?

3 08/01

341 S. Kohns Testing for Asymmetry in British, German and US Unemployment Data

1 08/01

342 W. Schnedler

The Virtue of Being Underestimated: A Note on Discriminatory Contracts in Hidden Information Models

5 08/01

343 H� Bonin

Will it Last? An Assessment of the 2001 German Pension Reform

3 08/01

344 E. Plug P. Berkhout

Effects of Sexual Preferences on Earnings in the Netherlands

5 08/01

345 J. Hampe M. Steininger

Survival, Growth, and Interfirm Collaboration of Start-Up Companies in High-Technology Industries: A Case Study of Upper Bavaria

5 08/01

346 L. Locher

The Determination of a Migration Wave Using Ethnicity and Community Ties

1 08/01

347 M. Lofstrom F. D. Bean

Labor Market Conditions and Post-Reform Declines in Welfare Receipt Among Immigrants

3 08/01

348 S. Neuman A. Ziderman

Can Vocational Education Improve the Wages of Minorities and Disadvantaged Groups? The Case of Israel

5 08/01

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349 J. T. Addison P. Portugal

Job Search Methods and Outcomes

1 08/01

350 J. T. Addison P. Portugal

Unemployment Duration: Competing and Defective Risks

1 08/01

351 J. D. Brown J. S. Earle

Gross Job Flows in Russian Industry Before and After Reforms: Has Destruction Become More Creative?

4 08/01

352 J. T. Addison J. S. Heywood X. Wei

Unions and Plant Closings in Britain: New Evidence from the 1990/98 WERS

1 08/01

353 T. Bauer S. Bender

Flexible Work Systems and the Structure of Wages: Evidence from Matched Employer-Employee Data

5 08/01

An updated list of IZA Discussion Papers is available on the center‘s homepage �����������