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Wage Dispersion and Allocation of Jobs

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  • Heyman, Fredrik

    ()
    (Research Institute of Industrial Economics)

Abstract

This paper use Swedish establishment-level panel data on job turnover and wages to test the hypothesis of a positive relation between job reallocation and wage compression as proposed by Bertola & Rogerson (1997). The effect of wage dispersion on job turnover is negative and significant in the manufacturing sector. The wage compression effect is stronger on job destruction than on job creation, suggesting that wages are more rigid downward than upward. For the service sector results are reversed. Further results include (i) a strong positive relationship between the industry share of temporary employees and job turnover and (ii) a negative relationship between the amount of working-time flexibility and job reallocation. The estimation method is industry fixed-effect models that control for sector heterogeneity.

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File URL: http://swopec.hhs.se/hastef/papers/hastef0479.pdf
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Bibliographic Info

Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 479.

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Length: 23 pages
Date of creation: 22 Oct 2001
Date of revision:
Publication status: Published as Heyman, Fredrik, 'How Wage Compression Affects Job Turnover' in Journal of Labor Research, 2008, pages 11-26.
Handle: RePEc:hhs:hastef:0479

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Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Phone: +46-(0)8-736 90 00
Fax: +46-(0)8-31 01 57
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Web page: http://www.hhs.se/
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Related research

Keywords: Job creation and job destruction; Wage dispersion; Temporary employment contracts.;

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References

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  1. Steve J. Davis & John Haltiwanger, 1991. "Gross Job Creation, Gross Job Destruction and Employment Reallocation," NBER Working Papers 3728, National Bureau of Economic Research, Inc.
  2. Burda, Michael C & Wyplosz, Charles, 1993. "Gross Worker and Job Flows in Europe," CEPR Discussion Papers 868, C.E.P.R. Discussion Papers.
  3. Edin, P.A. & Holmlund, B., 1992. "The Swedish Wage Structure : The Rise and Fall of Solidarity Policy," Papers 1992-13, Uppsala - Working Paper Series.
  4. bertola, G. & Rogerson, R., 1996. "Institutions and Labor Reallocation," Papers 272, Banca Italia - Servizio di Studi.
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  19. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, January.
  20. Mortensen, Dale T., 1994. "The cyclical behavior of job and worker flows," Journal of Economic Dynamics and Control, Elsevier, vol. 18(6), pages 1121-1142, November.
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  22. Davis, Steven J. & Haltiwanger, John, 1999. "Gross job flows," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 41, pages 2711-2805 Elsevier.
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Citations

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Cited by:
  1. Fredrik Heyman, 2008. "How Wage Compression Affects Job Turnover," Journal of Labor Research, Springer, vol. 29(1), pages 11-26, March.
  2. Haouas, Ilham & Yagoubi, Mahmoud & Heshmati, Almas, 2003. "The Impacts of Trade Liberalization on Employment and Wages in Tunisian Industries," IZA Discussion Papers 688, Institute for the Study of Labor (IZA).

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