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Sources of Intra-Industry Wage Dispersion: How Much Do Employers Matter?

Erica L. Groshen
The Quarterly Journal of Economics
Vol. 106, No. 3 (Aug., 1991), pp. 869-884
Published by: Oxford University Press
Stable URL: http://www.jstor.org/stable/2937931
Page Count: 16
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Sources of Intra-Industry Wage Dispersion: How Much Do Employers Matter?
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Abstract

Observed human capital explains less than half of wage variation. In BLS Industry Wage Surveys, establishment-based wage differentials (controlling for occupation) account for 20-70 percent of intra-industry wage variation. This corresponds to a standard deviation in wages of 14 percent of the mean, almost as large as interindustry wage variation. Investigation suggests that establishment wage differentials are not random variations or returns to usual measures of human capital.

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