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Compensation Dispersion Between and Within Hierarchical Levels
Author(s) -
OrtínÁngel Pedro,
SalasFumás Vicente
Publication year - 2007
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/j.1530-9134.2007.00132.x
Subject(s) - compensation (psychology) , dispersion (optics) , multilevel model , work (physics) , wage dispersion , econometrics , hierarchical database model , association (psychology) , demographic economics , economics , labour economics , psychology , computer science , social psychology , machine learning , data mining , engineering , physics , mechanical engineering , optics , efficiency wage , wage , psychotherapist
This paper studies the dispersion around the expected compensation of workers before and after controlling for hierarchical positions in cross‐section data samples. From data for Spanish managers, we find that this dispersion decreases with education and work experience before entering the current job and increases with job tenure. This finding contrasts with previous research that finds a positive association between compensation dispersion and education and work experience. We explain the new finding through a model of learning that separates compensation dispersion between jobs and within jobs (hierarchical positions). The model takes advantage of the information revealed when workers are promoted to their current hierarchical positions and allows for more robust tests of learning theories.