We are pleased to invite you to the seminar series on “Macroeconomics and Labor Markets“ organized by the Chair of Macroeconomics at the Friedrich-Alexander University Erlangen-Nuremberg, Prof. Merkl, the Chair of Global Governance and International Trade at the Friedrich-Alexander University Erlangen-Nuremberg, Prof. Moser, and the Competence Field Macroeconomics of the Institute for Employment Research (IAB). Researchers of both institutions, as well as national and international guests, present their current work at the intersection of labor- and macroeconomics.
The next seminar will be held on Tuesday, January 13, 12 noon to 1.30 PM (German time).
It will take place in person at WISO in room LG 0.423 (Lange Gasse 20, Nürnberg).
Online participation will be possible via Zoom.
Michael Irlacher (Johannes-Kepler-Universität Linz) will talk about “Wage Setting in Multiproduct Firms”.
Abstract:
This paper identifies product scope as a new determinant of firm-level wage markdowns. Using Danish matched employer-employee data, we document a negative elasticity between wages and scope, which has a similar magnitude to the firm-size wage premium but the opposite sign. Additional empirical evidence suggests that workers are compensated by increased job security at multiproduct firms. We rationalize the scope wage discount using a theory where workers value the internal labor market, as they can switch across product lines instead of leaving the firm. This flexibility makes product scope an amenity, giving multiproduct firms monopsony power to offer lower wages.