A. R. CARDOSO

SUMMARY
Multilevel modelling techniques are applied to a dataset that matches ®rms and workers, to pinpoint and
explain contrasts among company wage policies. Results indicate that wage di€erences across ®rms are
statistically signi®cant, a€ecting every parameter of the pay policy (returns to schooling, tenure, experience,
the penalty imposed on newly hired workers and on women). Gross labour productivity, average schooling
in the ®rm, ®rm size and economic sector are relevant forces shaping the contrast between employers' pay
policies. Copyright # 2000 John Wiley & Sons, Ltd.