This paper presents both theoretical analysis and econometric evidence for the United States, Great Britain and Norway on the extent to which hourly wages of different groups of workers are sensitive to local labour market conditions. We focus on differences by union status. Our theoretical...

Labour market outcomes of immigrants and natives are affected differently by macroeconomic conditions. In particular, we show that earnings of immigrants in Norway from outside the OECD area are more sensitive to local labour market conditions than are earnings of natives. Failure to account for...

This paper examines the impact of performance-related pay on wage differentials within firms. Our theoretical framework predicts that, compared to a fixed pay system, pay schemes based on individual effort increase within-firm wage inequality, while group-based bonuses have minor effects on wage...

Life cycle wages of immigrants from developing countries fall short of catching up with wages of natives. Using linked employer–employee data, we show that 40% of the native–immigrant wage gap is explained by differential sorting across establishments. We find that returns to experience and...

This paper examines the impact of performance-related pay on wage differentials within firms. Our theoretical framework predicts that, compared to a fixed pay system, pay schemes based on individual output increase within-firm wage inequality, while group-based bonuses have minor effects on wage...

Purpose – The purpose of this paper is to improve our understanding of why some firms tie compensation to worker performance as well as the variation in type of performance pay system across firms. Design/methodology/approach – The study first presents a theoretical framework that motivates...

We provide evidence on wage profiles of immigrants using CPS data from 1979 to 2001, taking into account that changes in labor market conditions impact natives and immigrants differently. High rates of immigrant wage assimilation in general, and relatively high wages of immigrant cohorts that...

Using Norwegian establishment surveys from 1997 and 2003, we show that performancerelated pay is more prevalent in firms where workers of the main occupation have a high degree of autonomy in how to organize their work. This observation supports an interpretation of incentive pay as motivated by...

We provide evidence on wage profiles of immigrants using Current Population Survey data from 1979 to 2003, taking into account that changes in labor market conditions impact natives and immigrants differently. High rates of immigrant wage assimilation, in general, and relatively high wages of...