Working Paper No. 655

Do Entrenched Managers Pay Their Workers More?

Publicerad: December 2, 2005; revised March 19, 2007Antal sidor: 41Nyckelord: Corporate Governance; Agency Problems; Private Benefits; Matched Employer-Employee Data; Wages JEL-koder: G32; G34; J31; J33

Do Entrenched Managers Pay Their Workers More? Henrik Cronqvist, Fredrik Heyman, Mattias Nilsson, Helena Svaleryd and Jonas Vlachos


Analyzing a large panel that matches public firms with worker-level data, we find that managerial entrenchment affects workers’ pay. CEOs with more control pay their workers more, but financial incentives through ownership of more cash flow rights mitigate such behavior. These findings do not seem to be driven by productivity differences, and are unaffected by a series of robustness tests. Further evidence suggests that higher pay comes with non-pecuniary private benefits for a CEO, such as lower-effort wage bargaining with aggressive workers and their unions. Moreover, we find that entrenched CEOs pay more to employees who are closer to them in the firm’s hierarchy, such as CFOs, vice-presidents and other executives, and white-collar workers who work at or geographically close to the corporate headquarters. The evidence is consistent with an agency model in which managers have a taste for both profits and highly paid employees, and implies that corporate governance can be of importance for labor market outcomes such as workers’ pay.

Fredrik Heyman

Kontakt

Tel: 08 665 4537
fredrik.heyman@ifn.se

Jonas Vlachos

Kontakt

Tel: 08 16 30 46
Mobil: 070 893 3240
jonas.vlachos@ne.su.se

Glädjeparadoxen

Historien om skolans uppgång, fall och möjliga upprättelse

Glädjeparadoxen.gif

Den här boken, författad av Gabriel Heller Sahlgren och Nima Sanadaji, spårar rötterna till den svenska skolans problem via en djupdykning i forskning och modern historia. På 1800-talet slog den progressiva utbildningsfilosofin igenom, med fokus på glädje, elevdemokrati och elevledd undervisning. Problemet var bara att den nya pedagogiken inte fungerade som det var tänkt. Forskningen tyder inte på att elever lär sig mer när de har roligt.

Läs mer

Institutet för Näringslivsforskning, Grevgatan 34 - 2 tr, Box 55665, SE-102 15 Stockholm, Sweden | Tel: +46-(0)8-665 45 00 | info@ifn.se