TY  - JOUR
AU  - Montgomery,Edward
AU  - Shaw,Kathryn
TI  - Pensions and Wage Premia
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3985
PY  - 1992
Y2  - February 1992
UR  - http://www.nber.org/papers/w3985
L1  - http://www.nber.org/papers/w3985.pdf
N1  - Author contact info:
Edward B. Montgomery
Dean, Georgetown Public Policy Institute
Georgetown University
3520 Prospect Street NW, 4th Floor
Washington DC 20007
Tel: 202/687-7051
Fax: 202/687-1904
E-Mail: ebm48@georgetown.edu

Kathryn L. Shaw
Graduate School of Business
Stanford University
Stanford, CA  94305-5015
Tel: 650/725-4168
Fax: 650/725-0468
E-Mail: kathryns@gsb.stanford.edu
AB  - In this paper we use that the theory of compensating differentials to identify sources of heterogeneity in firms' costs of providing fringe benefits and hence heterogeneity in the magnitude of the compensating differential. We estimate the relationship between pensions and wages controlling for variations in the size of the compensating differential related to firm size or the presence of a union. Both firm size and unionism are commonly associated with the payment of wage premia and/or the presence of market power where the costs of fringe benefits to the firm may be less. Our results are consistent with these a priori expectations and suggest that the magnitude of the compensating differential is significantly higher in nonunion and in small firms.
ER  -