9321053 Abowd The investigators have demonstrated that recently constructed matched employer-employee data files for France and the U.S. can be used to provide important new insights into the operation of the labor market. The French data has already been used to estimate models of wage determination that include both individual and firm effects. The firm-level averages of these measures are related to a number of important outcomes: profitability, productivity, capital/labor ratios and survival rates. This research will extend the analysis of the French data and develop a comparable American analysis using newly created American data files. The research is expected to determine whether or not The French results, showing a strong relation between compensation design variables and firm performance, also apply to American manufacturing firms. This research is important because it will enhance our understanding of wage determination and the dynamics of job creation and destruction at the level of the firm. ***
