Michelacci, Claudio; Quadrini, Vincenzo - C.E.P.R. Discussion Papers - 2005
financially constrained offer an increasing wage profile: they pay lower wages today in exchange of higher wages once they become … unconstrained and operate at a larger scale. In equilibrium, constrained firms are on average smaller and pay lower wages. In this … way the model generates a positive relation between firm size and wages. Using data from the National Longitudinal Survey …