Jobs in big firms command higher wages. I examine four theories that could explain this relation. First, large firms incur higher fixed employment costs including more specific training. Second, monitoring costs are greater in big firms and can be spread by hiring more productive workers. Third, large firms may choose to pay efficiency wages to deter shirking. Finally, large employers organize production around teams and pay higher wages to get workers who comply with the discipline of team production. The dispersion of wages and working conditions in the U.S. labor market reflect the heterogeneity of jobs (employment relations) and individuals.

Journal Article The Consumer Does Benefit from Feasible Price Stability: A Comment Get access Walter Y. Oi Walter Y. Oi University of Rochester Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 86, Issue 3, August 1972, Pages 494–498, https://doi.org/10.2307/1880806 Published: 01 August 1972

I. Two-part tariffs and a discriminating monopoly, 78.—II. Determination of a uniform two-part tariff, 81.—III. Applications of two-part tariffs, 88.—Appendix: Mathematical derivation of a uniform two-part tariff, 93.

T HE geometric distributed lag model developed by Koyck [8] and Nerlove [11] has been widely used in many empirical studies. The appropriate estimation method for parameters of these models is determined by the true probability distribution of random errors. If the random errors follow a first-order Markov process, Klein [7] has shown that the method of weighted regressions yields maximum likelihood estimators.' However, Klein's method requires prior knowledge of the true serial correlation of random errors. In the absence of such prior knowledge, one can resort to several alternative estimation methods.2 In this paper, I establish a bracketing rule applicable to a subset of the admissible probability distributions of random errors. Consider two special cases of Klein's method in which the true serial correlation p is (i) equal to zero and (ii) equal to the coefficient of the lagged dependent variable (1 X). The former case implies an orthogonal regression while the latter is equivalent to ordinary least squares (OLS). The orthogonal and OLS regressions yield two sets of parameter estimates lying on either side of the maximum likelihood parameter estimates provided that the true serial correlation lies in the interval 0 < p < 1 L, the OLS estimate of the population parameter 1 X. This basic bracketing theorem can be shown to hold even for fixed sample size. Moreover, the width of the interval bracketing the maximum likelihood parameter estimates is narrower, the larger is the partial correlation with the lagged dependent variable. This last result leads to an important implication. If a geometric distributed lag constitutes the correct specification of economic behavior, the dependent variable should be highly correlated with the lagged dependent variable. In this event, the discrepancy between OLS and orthogonal parameter estimates (which bracket the maximum likelihood estimates) will be small. Thus, the bias due to least squares is negligibly small provided that the true serial correlation lies in the interval 0 < p < 1 X. A simple geometric distributed lag model is described by a system of two structural equations. Yt a + 8Zt* + Ut + (1)

Wages are positively related to firm size. This relation was discovered by Henry L. Moore (1911) and later confirmed by, among others, Charles Brown and James Medoff (1989). The wage premium associated with working at a larger firm or plant is ubiquitous, but its magnitude varies across countries and over time. The reason for a size-related wage premium is harder to pin down. Paying supernormal wages to deter shirking, thereby saving monitoring costs, seems plausible, but a closer examination has led us to reject this explanation (Oi and Idson, 1999). At a big firm, the workplace is safer, and fringes are superior, so that these factors cannot be the source of a positive premium. It must be something else such as work effort. The theory that we advance is that employees at larger firms are more productive and hence command higher wages in a competitive labor market. The shape of the size–wage relation depends on technology, worker preferences, and working conditions other than size. It will change over time and across occupations.

THE PURPOSE OF THIS STUDY IS TO PROVIDE DATA AND ANALYSIS FOR A DISCUSSION OF PRIVATE CARRIAGE. THE STUDY ATTEMPTS TO ANSWER THREE QUESTIONS' 1. HOW HAS THE GROWTH OF PRIVATE ROAD HAULAGE COMPARED WITH FOR-HIRE HAULAGE AND OTHER MODES OF TRANSPORTATION{ 2. WHAT FIRMS IN WHAT INDUSTRIES AND REGIONS ARE NOW MAKING EXTENSIVE USE OF PROPRIETARY HAULAGE{ 3. WHAT ARE THE CHARACTERISTICS OF A TYPICAL FIRMS TRANSPORTATION REQUIREMENTS THAT LEAD IT TO EMPLOY PRIVATE CARRIAGE{ THE DATA WERE ANALYSED WITH THE AID OF AN ECONOMIC MODEL OF VERTICAL INTEGRATION WHICH ASSUMES THAT PROPRIETARY HAULAGE WILL BE EMPLOYED BY FIRM WHENEVER IT IS PROFITABLE FOR THE FIRM. THE HYPOTHESES THUS GENERATED WERE THEN SUBMITTED TO STATISTICAL TESTING. THIS RESEARCH WAS PERFORMED FOR THE TRANSPORTATION CENTER AT NORTHWESTERN UNIVERSITY. /RRL/