This paper demonstrates that large firms prefer to hire younger workers, which is implied by the firm-specific human capital investment theory. A simple model consistent with the implication is proposed to study large firms' hiring decisions and compensation structures. The main predictions of...

This paper investigates differences between large and small firms in new hires' ages and in compensation structures. An analysis of data from the Benefits Supplement to the Current Population Survey (CPS) shows that large firms hired younger workers than small firms and awarded starting wages...