Scandinavian Working Papers in Economics

Working Paper Series,
Trade Union Institute for Economic Research

No 193: The Employer Age-Wage Effect: Evidence from Matched Employer-Employee Data

Fredrik Heyman
Additional contact information
Fredrik Heyman: Trade Union Institute for Economic Research, Postal: FIEF, Wallingatan 38, SE-111 24 Stockholm, Sweden

Abstract: This paper uses a large matched employer-employee data set for Sweden to study the relationship between firm age and individual wages, systematically addressing a variety of possible explanations for observing a firm-age wage effect. Results show considerable heterogeneity across years, along segments of the firm age distribution and across industries. A positive and significant firm age-wage premium, robust to a number of control variables, is found in 1995. This effect is not found for 1987 and 1991, two periods characterised by different business cycle conditions than 1995. The relationship between firm age and wages is not monotonic; rather it varies along segments of the firm age distribution. It also differs systematically across different sectors of the economy. A positive firm age effect is found only in the manufacturing sector. Finally, taking into account that larger firms are also older firms, results show that inclusion of firm age does not alter the positive effect of firm size on wages.

Keywords: Wages; firm age; firm size; matched employer-employee data

JEL-codes: J21; J31; J63

31 pages, May 25, 2004

Full text files

WP193.pdf PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Sune Karlsson ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-01-23 23:31:54.