The Hard-To-Measure Aspects Of Firms

This dissertation explores the aspects of firms that are hard-to-measure, hard-to-observe, and hard-to-quantify. Chapter 3 investigates amenities of work that go beyond a wage. Using matched employee-employer data for the United States, this chapter estimates the joint distribution of wages, amenities, and job satisfaction across firms. There are three main findings. First, high-paying firms are high-satisfaction firms because they offer better amenities. Second, workers, especially high-earners, are willing to pay for job satisfaction, gaining in amenity value at least 50 percent of the average wage when moving from the worst- to the best-amenity firms. Third, since the elasticity of total compensation inclusive of amenity value to wages across firms exceeds one, incorporating non-wage amenities raises total compensation variance across firms by at least 52 percent. Chapter 4 investigates firm reputation. Using workers\u27 volunteered reviews on the platform Glassdoor, we find that the content most valuable to jobseekers (negative information) is the kind most risky to supply, pointing to a Catch-22. Higher ratings increase labor supply to less well-known firms, creating an incentive for smaller firms to discourage negative reviews. Concerns about employer retaliation discourage negative reviews and motivate employees who do disclose to conceal aspects of their identity, degrading the information’s value. Reputation institutions provide valuable but partial solutions to workers\u27 information problems. Chapter 5 investigates firm culture. Using a sample of corporate scandals and data from the website Glassdoor, we study how negative reputation shocks affect the relationship between firms and their employees. Worker sentiment declines sharply and persistently following scandals, driven by diminished perceptions of management and culture. While base earnings and fringe benefits remain unchanged, variable compensation falls 10 percent. Our results demonstrate that rank-and-file employees are adversely impacted by corporate misconduct