Firm wage differentials in a competitive industry: some matched‐panel evidence

Studies wage dispersion across firms and time in a specific industry that exhibits competitive features – the Portuguese clothing industry in the 1991‐1994 period. By drawing on a large matched employer‐employee panel, obtains the following results: the workers' firm affiliation plays an important role in wage determination; there is a sizeable and persistent dispersion of firm‐fixed effects, which is also similar for workers of different tenure levels and occupations; workers in high‐turnover firms are generally paid less. It is believed that these findings are not consistent with a simple competitive labour market model.