Institute Insights: Pay, Employment and Dynamics of Young Firms

Friday, January 17, 2020

Featuring UNC Kenan-Flagler Business School Associate Professor of Finance Paige Ouimet

Prevailing data suggests that young firms pay employees less than their more mature counterparts. But does a closer look at the data tell a different story?

When UNC Kenan-Flagler researcher Paige Ouimet and colleagues exploited the two-sided panel nature of confidential microdata from the U.S. Census Bureau to control for relevant dimensions of worker and firm heterogeneity, they uncovered a positive and significant young-firm pay premium. They also found that worker selection at firm birth is related to future firm dynamics, including survival and growth.

For the full story, read the white paper here.