Firm Size Wage Differentials in Switzerland : Evidence from Job Changers

We analyze firm size wage differentials by not only studying wage changes of workers who move between firms of different size classes but also by explicitly analyzing the underlying mobility decisions. Our analysis is based on a new data-set for Switzerland. We consider the OLS size premium as a distinct determinant of individual wages and ask how this wage-component affects the dynamics of individual wages over time and the mobility and search behavior of workers. We find no evidence for the hypothesis that larger employers provide worse working conditions, but about half of the OLS size differential is accounted for by worker heterogeneity