Working Paper: CEPR ID: DP2980
Authors: Thomas K. Bauer; Stefan Bender
Abstract: A growing theoretical and empirical literature is concerned with the effects of flexible workplace systems or High Performance Work Organizations (HPWOs) on wages. Existing theoretical literature suggests that these forms of organization should lead to higher inequality across firms, increased segregation of labour markets and decreased within-firm inequality. This Paper makes use of a new employer-employee-linked data set for Germany to examine the labour market effects of flexible workplace systems. Our results suggest that HPWOs increase both across and within firm inequality. We do not find evidence, however, that HPWOs affect their employment structure.
Keywords: employment; inequality; linked employer-employee data set; organizational change
JEL Codes: J30; L20; O30
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| HPWOs (I19) | increased wage inequality (J31) |
| HPWOs (I19) | lower average wages (J31) |
| flexible workplace practice + new IT technologies (J29) | decrease mean wages of unskilled blue-collar workers (F66) |
| HPWOs (I19) | increased within-firm wage inequality (J31) |
| HPWOs (I19) | insignificant or positive effects on high-skilled workers (F66) |
| HPWOs (I19) | no significant alteration in employment structure (J21) |