Return to Training and Establishment Size: A Reexamination of the Size-Wage Puzzle

37 Pages Posted: 28 Apr 2009

See all articles by Shuaizhang Feng

Shuaizhang Feng

Shanghai University of Finance and Economics - Department of Economics; Princeton University; IZA Institute of Labor Economics

Abstract

The paper reexamines the employer size-wage puzzle using NLSY79 data. The empirical results show that even for those who never receive any training from their employers, size-wage premium still exists and is quantitatively important. Wage increases associated with receiving on-the-job training are less in large establishments than in small ones. In addition, there is no evidence that starting wages in large establishments are lower than in small establishments. Theories that explain the size-wage puzzle using training and other endogenous productivity differences are not consistent with these new findings.

Keywords: size-wage premium, return to training, establishment size

JEL Classification: J31, J24

Suggested Citation

Feng, Shuaizhang, Return to Training and Establishment Size: A Reexamination of the Size-Wage Puzzle. IZA Discussion Paper No. 4143, Available at SSRN: https://ssrn.com/abstract=1395250 or http://dx.doi.org/10.2139/ssrn.1395250

Shuaizhang Feng (Contact Author)

Shanghai University of Finance and Economics - Department of Economics ( email )

777 Guoding Road
Shanghai, AK Shanghai 200433
China

Princeton University

22 Chambers Street
Princeton, NJ 08544-0708
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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