Wage policy patterns at the firm level and vulnerable employees

Despite consistent and growing proofs on the negative labour market outcomes for individuals restrained to lower labour market segments, evidence on the impact of firm characteristics on segregation into disadvantaged groups is still poor. This paper argues that the wage policy of the firm is a significant driver of segregation into disadvantaged categories of the labour market. The classification of firm-level wage policy models allows testing their impact on employee wage dynamics. The outputs of the proposed empirical analyses show that employers’ wage policy patterns significantly affect the earnings dynamics of vulnerable categories of employees, including younger employees, employees on temporary contracts and employees who undergo parental leave or sickness absence