Firm-Specific Determinants of the Real Wage.

Bargaining models suggest that firm-specific variables play an important role in wage determination. Yet previous empirical studies of wage determination have largely ignored these variables. The authors' analysis of a large panel data set of U.S. wage contracts suggests that firm-specific variables suggested by bargaining models, such as the value of sales, the capital-labor ratio, and the financial liquidity of the firm, are important determinants of negotiated real wages. Copyright 1992 by MIT Press.