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- Title
Management Practices, Pay, and Pay Inequality.
- Authors
Monteiro, Natália P.; Straume, Odd Rune
- Abstract
We use rich Portuguese data to analyse the relationship between the use of different management practices and worker pay in a large representative sample of firms. We find that the overall score on the use of management practices is significantly associated with both higher average wages and higher within-firm wage dispersion. The positive relationship between management practices and average pay is present throughout the wage distribution and for all occupational skill groups, but is stronger for workers higher up in the wage distribution and in higher-skilled occupations. These results are driven by incentives-based management practices, in particular practices related to reward and promotion of high performers in the firm. We also identify a potential moderating role of works councils. Our results suggests that, in firms with works councils, a larger share of the gains from productivity-enhancing management practices is shared with workers, and these gains are more evenly distributed across the workforce.
- Subjects
INCOME inequality; WAGE differentials; WORKS councils; PAY for performance; WAGES; OCCUPATIONAL prestige
- Publication
Journal of Labor Research, 2024, Vol 45, Issue 2, p254
- ISSN
0195-3613
- Publication type
Article
- DOI
10.1007/s12122-024-09357-w