Organizations are sites where multiple resources are pooled, created, and distributed. I study how the transformation of organization in the past decades has shaped compensation and employment.
Growing Apart: The Changing Firm-Size Wage Premium and Its Inequality Consequences
(with J. Adam Cobb)
Wage inequality in the United States has risen dramatically over the past several decades, prompting scholars to develop a number of theoretical accounts for the upward trend. This study takes an organizational approach to examine how changes in the firm-size wage effect (FSWE)—a phenomenon whereby otherwise similar workers earn more when employed by large firms—have affected the wage distribution in the U.S labor market. Using data from the Current Population Survey and Survey of Income and Program Participation, our findings reveal that in 1987, although all workers benefited from a firm-size wage premium, the premium was significantly higher for individuals at the bottom (e.g., 10th and 25th percentiles) and middle of the wage distribution (e.g., 50th percentile) compared to those at the top (90th percentile). Between 1987 and 2014, however, whereas the average FSWE declined markedly, the decline was exclusive to those at the bottom and middle of the wage distribution while there was no change for those at the top. As such, the uneven declines in the FSWE across the wage distribution explain between 20 and 30 percent of rising wage inequality during this period, suggesting firms are of great importance to the study of rising inequality.
The Rise of Finance and Firm Employment Dynamics
This article investigates the organizational links between the rise of finance and employment. I argue that the rise of finance increased the transfer of resources from productive activities to financial markets and marginalized the role of labor in the revenue generating and distributing processes, which in turn led to weaker employment growth. This broader process operates through at least three organizational processes: 1) firms' increasing operation in banking, trading, and other financial activities depresses investment in the workforce; 2) the expansion of corporate debt imposes constraints on employment growth; and 3) the growing rewards for shareholders further diverts resources away from workers. Importantly, the employment impacts are uneven within firms. Production and service workers are more vulnerable to shifts associated with the rise of finance than managers and professionals.
Union, Premium Cost, and the Provision of Employment-based Health Insurance
(with Samuel Bondurant & Andrew Messamore )
The decline of employment-based health plans is commonly attributed to the rising premium costs. Using restricted data and a matched sample from the Medical Expenditure Panel Survey-Insurance Component, we extend previous studies by testing the relationships between premium costs, employment relationships, and the provision of health benefits between 1999 and 2012. We report that both establishment- and state-level union densities are associated with higher likelihood of employers providing health plans, while right-to-work legislation is associated with lower provision. These factors combined rival rising premium cost in predicting offering. Our finding indicates that the declining provision of health benefits could be in part driven by the transformation of the employment relationship in the United States and that labor unions may remain a critical force in sustaining employment-based coverage in the 21st century.
Firm Size and Employment during the Pandemic
(with Carolina Aragão and Guillermo Dominguez)
Previous studies have established that firm size is associated with a wage premium, but the wage premium has declined in recent decades. The authors examine the risk for unemployment by firm size during the initial outbreak of coronavirus disease 2019 in the United States. Using both yearly and state-month variation, the authors find greater excess unemployment among workers in small enterprises than among those in larger firms. The gaps cannot be entirely attributed to the sorting of workers or to industrial context. The firm size advantage is most pronounced in sectors with high remotability but reverses in the sectors most affected by the pandemic. Overall, these findings suggest that firm size is linked to greater job security and that the pandemic may have accelerated prior trends regarding product and labor market concentration. They also point out that the initial policy responses did not provide sufficient protection for workers in small and medium-sized businesses.