Firm-Specific Determinants of the Real Wage
Janet Currie, Sheena McConnell
NBER Working Paper No. 4023
Bargaining models suggest that firm-specific variables play an important role in wage determination. Yet previous empirical studies of wage determination have largely ignored these variables. Our analysis of a large panel data set of U.S. wage contracts suggests that firm-specific variables suggested by bargaining models. such as the values of sales. the capital-labor ratio, and the financial liquidity of the firm. are important determinants of negotiated real wages.
Published: Review of Economics and Statistics, May 1992