Working in Family Firms: Less Paid But More Secure? Evidence from French Matched Employer-Employee Data

By Andrea Bassanini, Eve Caroli, A. Rebérioux, T. Breda. Social Science Research Network, 2011

146 citations recorded by the source corpus.

We study compensation packages in family and non-family firms. Using French matched employer-employee data, we first show that family firms pay on average lower wages. We find that part of this wage gap is due to low wage workers sorting into family firms and high wage workers sorting into non-family firms. However, we also find evidence that company wage policies differ according to ownership status, so that the same worker is paid differently under family and non-family firm ownership. We also find evidence that family firms are characterised by lower job insecurity, as measured by dismissal rates and by the subjective risk of dismissal perceived by workers. In addition, family firms appear to rely less on dismissals – and more on hiring reductions – than non-family firms when they downsize. We show that compensating wage differentials account for a substantial part of the inverse relationship between the family/non-family gaps in wages and job security.

Subfields: Accounting, Economics and Econometrics, Organizational Behavior and Human Resource Management

View Paper: https://www.semanticscholar.org/paper/a90f0b3aedaf467a2339f8b952ee7f4a9a6be00e

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Citations in the corpus

Are Family Firms Good Employers (2017, background): “In cases where ownership data was missing, we follow Wilson, Wright, and Scholes (2013) and Westhead and Cowling (1998) and identify family firms as those in which family board members comprised 20 percent or more of the board.”
Driving factors of innovation in family and non-family SMEs (2018, background): “In the time of the financial crisis, Bassanini et al. (2013) were able to illustrate that family firms reduced their new hires instead of increasing the number of layoffs in comparison to non-family firms.”
Employment and Wage Insurance within Firms: Worldwide Evidence (2018, unknown): “6 Several papers focus on the difference between family and non-family firms in France, where family firms appear to provide more employment insurance to their employees than non-family ones: Sraer and Thesmar (2007) and Bassanini et al. (2011) document that in heir-managed firms employment is less ”