Firm Size,Wages and Production Technology |
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Authors: | Pull Kerstin |
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Institution: | (1) Institute of Labour Law and Industrial Relations in the European Community, University of Trier, Schloss Quint, P.O. Box 18 12 30, D-54263 Trier, Germany |
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Abstract: | Large firms pay higher wages than small ones. In this paper, the employer-size wage effect is derived with the help of a simple Nash-bargaining model where size is captured by the extent to which the production technology exhibits economies of scale. It can be shown that under reasonable assumptions an increasing returns to scale technology leads to higher wages than a constant or decreasing returns to scale technology. |
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