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Home | Events | Careers and Wages in Family Firms: Evidence from Matched Employer-Employee Data
Seminar

Careers and Wages in Family Firms: Evidence from Matched Employer-Employee Data

  • Location
    Erasmus University Rotterdam, Campus Woudestein, Polak 2-22
    Rotterdam
  • Date and time

    March 04, 2025
    11:45 - 13:00

Abstract We investigate compensation policies in family and non-family firms using a novel employer-employee matched dataset comprising nearly the universe of Italian incorporated firms and ownership information. Family firms pay significantly lower wages and offer slower and less rewarding careers. Differences in worker sorting account for half of the wage gap while productivity differences and compensating differentials explain little of the residual gap. The wage distribution in family firms is more compressed, with infrequent promotions. We rationalize this evidence with a model where family owners seek to maintain control, creating a "glass ceiling" that limits their employees' career progression. Joint paper with Edoardo Di Porto, Marco Pagano, Raffaele Saggio, and Fabiano Schivardi.