Wage Sorting Trends
AbstractUsing a population-wide Danish Matched Employer-Employee panel from 1980-2006, we document a strong trend towards more positive assortative wage sorting. The correlation between worker and firm fixed effects estimated from a log wage regression increases from -0.07 in 1981 to .14 in 2001. The nonstationary wage sorting pattern is not due to compositional changes in the labor market, primarily occurs among high wage workers, and comprises 41 percent of the increase in the standard deviation of log real wages between 1980 and 2006. We show that the wage sorting trend is associated with worker reallocation via voluntary quits.
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Bibliographic InfoPaper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number 2012-17.
Date of creation: 09 Aug 2012
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Web page: http://www.econ.au.dk/afn/
Matched Employer-Employee Data; Firmfixed effects; Worker fixed effects; Wage sorting; Wage inequality; Voluntary quits.;
Other versions of this item:
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-08-23 (All new papers)
- NEP-HRM-2012-08-23 (Human Capital & Human Resource Management)
- NEP-LAB-2012-08-23 (Labour Economics)
- NEP-LMA-2012-08-23 (Labor Markets - Supply, Demand, & Wages)
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