The analysis of wage distribution has attracted scholars from different disciplines seeking to develop theoretical arguments to explain the upward or downward trend. In particular, how the middle management wage premium changes in different contexts is a relatively neglected area of research. This study argues that wage distribution changes in different contexts, representing different forms of capitalism. To shed light on this, we considered the size and the shape of the wage premium to supervision paid to middle managers in Germany and the UK. We find evidence of two forms of context: middle managers are paid differently for the same task according to the economy where they work; of this amount, about half of the difference is related to the context. We frame the analysis within the literature on varieties of capitalism.
AcemogluDNewmanAF (2002) The labor market and corporate structure. European Economic Review46(10): 1733–1756.
2.
AmableB (2008) The heterogeneity of competing capitalisms and business systems. Socio-Economic Review6(4): 771–784.
3.
BaccaroAHowellC (2017) Trajectories of Neoliberal Transformation: European Industrial Relations since the 1970s. Cambridge: Cambridge University Press.
4.
BakerGHolmströmB (1995) Internal labor markets: too many theories, too few facts. American Economic Review85: 255–259.
5.
BeaudryPFrancoisP (2010) Managerial skills acquisition and the theory of economic development. Review of Economic Studies77(1): 90–126.
6.
BernhardtD (1995) Strategic promotion and compensation. The Review of Economic Studies62(2): 315–339.
7.
BlauFDKahnLM (1996) Wage structure and gender earnings differentials. An international comparison. Economica63(250): S29–S62.
8.
BöckermanPMalirantaM (2013) Outsourcing, occupational restructuring, and employee well-being: is there a silver lining?Industrial Relations52(4): 878–914.
9.
BrewsterCWoodGBrookesM (2008) Similarity, isomorphism or duality? Recent survey evidence on the human resource management policies of multinational corporations. British Journal of Management19(4): 320–342.
10.
BruceABuckTMainB (2005) Top executive remuneration: a view from Europe. Journal of Management Studies42(7): 1493–1506.
11.
BrückerHHauptmannAJahnEJ, et al (2014) Migration and imperfect labor markets: theory and cross-country evidence from Denmark, Germany and the UK. European Economic Review66: 205–225.
12.
BrysonAWhiteM (2019) Migrants and low-paid employment in British workplaces. Work, Employment and Society33(5): 759–776.
13.
BünningMPollmann-SchultM (2016) Family policies and fathers’ working hours: cross-national differences in the paternal labour supply. Work, Employment and Society30(2): 256–274.
14.
CameronVHeckmanJJ (1998) Life cycle schooling and dynamics selection bias: models and evidence for five cohorts of American males. The Journal of Political Economy106(2): 262–333.
15.
CurrieJMadrianB (1999) Health, health insurance and the labor market. In: AshenfelterOCardD (eds) Handbook of Labor Economics. Amsterdam: Elsevier, 3309–3416.
16.
DenckerJCFangC (2016) Rent seeking and the transformation of employment relationships. American Sociological Review69(5): 659–676.
17.
DengXGaoH (2013) Nonmonetary benefits, quality of life, and executive compensation. Journal of Financial and Quantitative Analysis48(1): 197–218.
18.
DiNardoJFortinNMLemieuxT (1996) Labor market institutions and the distribution of wages 1973–1992: a semiparametric approach. Econometrica64(5): 1001–1044.
19.
DoreRP (2000) Stock Market Capitalism: Welfare Capitalism: Japan and Germany Versus the Anglo-Saxons. Oxford: Oxford University Press.
20.
Dotti SaniGMSchererS (2018) Maternal employment: enabling factors in context. Work, Employment and Society32(1): 72–95.
21.
EichhorstWMarxP (2011) Reforming German labour market institutions: a dual path to flexibility. Journal of European Social Policy21(1): 73–87.
22.
EyraudFMarsdenDSilvestreJ (1990) Occupational and internal labour markets in Britain and France. International Labour Review129(4): 501–517.
23.
FarndaleEBrewsterCLigthartP, et al (2017) The effects of market economy type and foreign MNE subsidiaries on the convergence and divergence of HRM. Journal of International Business Studies48(9): 1065–1086.
24.
FernandesNFerreiraMAMatosP, et al (2013) Are US CEOs paid more? New international evidence. Review of Financial Studies26(2): 323–367.
25.
FestingM (2012) Strategic human resource management in Germany: evidence of convergence to the U.S. model, the European model, or a distinctive national model?Academy of Management Perspectives26(2): 37–54.
26.
FortinNLemieuxTFirpoS (2010) Decomposition methods in economics. NBER Working Paper No. 16045. Cambridge, MA: National Bureau of Economic Research.
27.
GoergenMBrewsterCWoodG, et al (2012) Varieties of capitalism and investments in human capital. Industrial Relations51(1): 501–527.
28.
Gomez-MejiaLWisemanRMDykesBJ (2005) Agency problems in diverse contexts: a global perspective. Journal of Management Studies42(7): 1508–1517.
29.
GoosMManningA (2007) Lousy and lovely jobs: the rising polarization of work in Britain. Review of Economics and Statistics89(1): 118–133.
30.
GreckhamerT (2016) CEO compensation in relation to worker compensation across countries: the configurational impact of country-level institutions. Strategic Management Journal37(4): 793–815.
31.
HallPASoskiceD (2001) Introduction. In: HallPASoskiceD (eds) Varieties of Capitalism. Oxford: Oxford University Press, 1–68.
32.
HallPAThelenK (2009) Institutional change in varieties of capitalism. Socio-Economic Review7(1): 7–34.
33.
HassardJMorrisJ (2018) Contrived competition and manufactured uncertainty: understanding managerial job insecurity narratives in large corporations. Work, Employment and Society32(3): 564–580.
34.
HertwigMKirschJWirthC (2018) Defence is the best offence: horizontal disintegration and institutional completion in the German coordinated market economy. Work, Employment and Society33(3): 500–517.
35.
IversenTSoskiceD (2006) Electoral institutions and the politics of coalitions: why some democracies redistribute more than others. American Political Science Review100(2): 165–181.
36.
JacksonGDeegR (2008) Comparing capitalisms: understanding institutional diversity and its implications for international business. Journal of International Business Studies39(3): 540–561.
37.
JacksonGSorgeA (2012) The trajectory of institutional change in Germany, 1979–2009. Journal of European Public Policy19(8): 1146–1167.
38.
JensenMCMurphyKJ (1990) Performance pay and top-management incentives. The Journal of Political Economy98(2): 225–264.
39.
KallebergAL (2009) Precarious work, insecure workers: employment relations in transition. American Sociological Review74(1): 1–22.
40.
KornelakisA (2014) Liberalization, flexibility and industrial relations institutions: evidence from Italian and Greek banking. Work, Employment and Society28(1): 40–57.
41.
LallementM (2011) Europe and the economic crisis: forms of labour market adjustment and varieties of capitalism. Work, Employment and Society25(4): 627–641.
42.
LeonardJS (1987) Carrots and sticks: pay, supervision and turnover. Journal of Labor Economics5(2176): 136–152.
43.
McNultyYBrewsterC (2019) Working Internationally. Expatriation, Migration and Other Global Work. Cheltenham: Edward Elgar Publishing.
44.
MarsdenD (1990) Institutions and labour mobility: occupational and internal labour markets in Britain, France, Italy and West Germany. In: BrunettaRDell’AringaC (eds) Labour Relations and Economic Performance. London: Palgrave Macmillan, 414–438.
45.
OrtegaJ (2009) Why do employers give discretion? Family versus performance concerns. Industrial Relations48(1): 1–26.
46.
ÖzçelikGHaak-SaheemWBrewsterC, et al (2019) Hidden inequalities amongst the international workforce. In: NachmiasSCavenV (eds) Inequality and Organizational Practice. Cham: Palgrave Macmillan, 221–251.
47.
PalierBThelenK (2010) Institutionalizing dualism: complementarities and change in France and Germany. Politics & Society38(1): 119–148.
48.
PemnerRJLawrenceS (2004) ILO Bureau of Statistics: data sources. Industrial Relations: A Journal of Economy and Society43: 699–703.
49.
PicchioMMussidaC (2011) Gender wage gap: a semi-parametric approach with sample selection correction. Labour Economics18(5): 564–578.
50.
RuedaDPontussonJ (2000) Wage inequality and varieties of capitalism. World Politics52(3): 350–383.
51.
SalverdaWMayhewK (2009) Capitalist economies and wage inequality. Oxford Review of Economic Policy25(1): 126–154.
52.
Sánchez-MiraNO’ReillyJ (2019) Household employment and the crisis in Europe. Work, Employment and Society33(3): 422–443.
53.
SchneiderMRPaunescuM (2012) Changing varieties of capitalism and revealed comparative advantage from 1990 to 2005. Socio-Economic Review10(4): 731–753.
54.
SilvermanB (1986) Density Estimation for Statistics and Data Analysis. London and New York: Chapman and Hall.
55.
SissonPGreenAELeeN (2018) Linking the sectoral employment structure and household poverty in the United Kingdom. Work, Employment and Society32(6): 1078–1098.
56.
ŠkerlavajMČerneMDysvikA, et al (2016) Capitalizing on Creativity at Work. Cheltenham: Edward Elgar Publishing.
57.
StreeckW (1997) German capitalism: does it exist? Can it survive?New Political Economy2(2): 237–256.
58.
StreeckW (2008) Reforming Capitalism: Institutional Change in the German Political Economy. Oxford: Oxford University Press.
59.
StreeckW (2014) Buying Time: The Delayed Crisis of Democratic Capitalism. London and New York: Verso.
60.
StreeckWThelenK (2005) Beyond Continuity: Institutional Change in Advanced Political Economics. Oxford: Oxford University Press.
61.
ThelenK (2001) Varieties of labor politics in the developed democracies. In: HallPASoskiceD (eds) Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. Oxford: Oxford University Press, 71–103.
62.
ThelenK (2014) Varieties of Liberalization and the New Politics of Social Solidarity. New York: Cambridge University Press.
63.
VitolsS (2001) Varieties of corporate governance: comparing Germany and the UK. In: HallPASoskiceD (eds) Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. Oxford: Oxford University Press, 337–360.
64.
WittMAJacksonG (2016) Varieties of capitalism and institutional comparative advantage: a test and reinterpretation. Journal of International Business Studies47(7): 778–806.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
