Measuring wage effects of plant size

There are large plant size–wage effects in the Nordic countries after taking into account individual and job characteristics as well as systematical sorting of the workers into various plant-sizes. The plant size–wage elasticities we obtain are, in contrast to other dimensions of the wage distribution, comparable to the plant-size effects in other countries such as the U.S. with completely different institutions of wage setting. We also investigate the consequence of measurement error associated with the common practice of using midpoints of plant-size classes to estimate the plant size–wage elasticity. Our results indicate that using size–class midpoints yields essentially the same results as using exact measures of plant size