Wages in High-Tech Start-Ups – Do Academic Spin-Offs Pay a Wage Premium?

Academic spin-offs are an important means for transferring skills, research results and technologies developed at universities to the for-profit private sector. Due to their origin from universities, spinoffs are operating at the forefront of the technological development. Therefore, spin-offs have a high demand for employees with cutting edge knowledge and technical skills. As a consequence, spin-offs may need to provide a wage premium in order to actually attract and hire adequately skilled workers from the external labour market and retain them in the firm. However, theoretical studies on the determinants of wages also provide contrary arguments that militate in favour of lower wages in spin-offs. For instance, employees might be willing to accept lower wages because of non-monetary returns associated with their jobs (e.g., the more flexible and more research affine working conditions offered by spin-offs).

Dorner, Matthias, Helmut Fryges and Kathrin Schopen (2015), Wages in High-Tech Start-Ups – Do Academic Spin-Offs Pay a Wage Premium?, ZEW Discussion Paper No. 15-038, Mannheim.