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Track T5-1: Labor and the Finance of Human Capital
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| Presentations | ||
Firms with Benefits? Nonwage Compensation and Implications for Firms and Labor Markets 1UNC; 2University of Maryland Nondiscrimination regulations, administrative costs, and fairness considerations can constrain the within-firm distribution of benefits. Using novel job-level data on nonwage benefits, we find a larger firm component of the variation in benefits than wages. We show that the presence of high-wage colleagues (or high-wage peers in other local firms) positively predicts workers’ benefits, controlling for job characteristics including own wages. Firms with more generous benefits attract and retain more high-wage workers, but also reduce their reliance on low-wage workers more than low-benefit peers. Our results suggest that benefits disproportionately matter for worker-firm matching and, hence, compensation inequality.
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