Date Added: Sep 2012
It is a stylized fact that larger firms pay higher wages than smaller firms and that older firms pay higher wages than younger firms. Many studies have sought to explain the firm size and firm age wage gaps. Generally speaking, a considerable part of the firm size wage gap cannot be explained: \"The cause of the positive relationship between wages and firm size has been an economic mystery for almost a century\". The purpose of this paper is to examine to which extent employee remuneration differs between firms of different size and age, within the SME population. In addition, the authors examine to which extent they can explain any firm size and/or firm age wage gap by various characteristics of employer, employee and enterprise.