The Employer Size-Wage Gap: Evidence for Britain

Abstract

. University of Edinburgh and University of SussexFinal version received 5 May 1992.This paper presents estimates for the employer plant size-wage gap for Britain. Using anordered probit model, selectivity-corrected wage equations are estimated for three plant sizecategories. In a comparison between plants with more than 500 workers and those with lessthan 100, a wage gap estimate of over 17 per cent is detected. The wage effects of unionizationin plants with more than 500 workers is reported as insignificant. In contrast to evidenceprovided by Idson and Feaster (1990) for the United States, no evidence of non-randomsorting of workers across plant size is detected. .