The Employer Size-Wage Gap: Evidence for Britain

This paper presents estimates for the employer plant size-wage gap for Britain. Using an ordered probit model, selectivity-corrected wage equations are estimated for three plant size categories. In a comparison between plants with more than 500 workers and those with less than 100, a wage gap estimate of over 17 percent is detected. The wage effects of unionization in plants with more than 500 workers is reported as insignificant. In contrast to evidence provided by T. L. Idson and D. J. Feaster (1990) for the United States, no evidence of nonrandom sorting of workers across plant size is detected.