Estimating the Wage Premium to Supervision for Middle Managers in Different Contexts: Evidence from Germany and the UK

Abstract

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.