Firm-Specific Determinants of the Real Wage

Janet Currie, Sheena McConnell

NBER Working Paper No. 4023
Issued in March 1992
NBER Program(s):   LS

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.

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Published: Review of Economics and Statistics, May 1992

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