WAGES AND ORGANIZATIONAL-FACTORS - WHY DO SOME ESTABLISHMENTS PAY MORE

In a market-clearing view of wage formation it is claimed that only ex ternal factors, namely the conditions in the labor market, affect wage s for a given type of labor in any one firm. However, there are severa l non-market-clearing theories in which importance is given also to fi rm-specific variables. In this article the effects of organizational f actors on the wage level of the firm are studied. Using a data set wit h several observations from each establishment, it is possible to dist inguish within-establishment and between-establishment differences. Or ganizational factors such as establishment size, the presence of a per sonnel officer and managers' ownership are found to create wage differ entials across establishments. The results are consistent with implica tions from several non-market-clearing theories.