Working in Family Firms: Less Paid but More Secure? Evidence from French Matched Employer-Employee Data

Andrea Bassanini, Eve Caroli, Antoine Reberioux and Thomas Breda ()

No 5842, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We study compensation packages in family and non-family firms. Using matched employer-employee data for a representative sample of French establishments, we first show that family firms pay on average lower wages to their workers. We find that part of this wage gap is due to differences in unobserved characteristics of workers across family and non-family firms. However, we also find evidence that company wage policies differ according to ownership status, so that workers staying in the same firm enjoy on average a 3% pay increase when a family firm becomes non-family owned and suffer a similar pay drop when the ownership transition occurs the other way round. In contrast, we find evidence that family firms are characterised by lower job insecurity, as measured by dismissal rates and by the subjective risk of dismissal perceived by workers. In addition, family firms appear to rely less on dismissals – and more on hiring reductions – than non-family firms when they downsize. We show that compensating wage differentials account for a substantial part of the inverse relationship between the family/non-family gaps in wages and job security.

Keywords: wages; job security; linked employer-employee data; family firms; compensating wage differentials (search for similar items in EconPapers)
JEL-codes: G34 J31 J33 J63 L26 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2011-07
New Economics Papers: this item is included in nep-bec, nep-eur, nep-lab, nep-lma and nep-sbm
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Published - revised version published in: Industrial and Labor Relations Review, 2013, 66 (2), 433-466

Downloads: (external link)
https://docs.iza.org/dp5842.pdf (application/pdf)

Related works:
Working Paper: Working in family firms: less paid but more secure? Evidence from French matched employer-employee data (2011)
Working Paper: Working in family firms: less paid but more secure? Evidence from French matched employer-employee data (2011)
Working Paper: Working in family firms: less paid but more secure? Evidence from French matched employer-employee data (2011)
Working Paper: Working in family firms: less paid but more secure? Evidence from French matched employer-employee data (2010)
Working Paper: Working in family firms: less paid but more secure? Evidence from French matched employer-employee data (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp5842

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().