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How Wage Compression Affects Job Turnover

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  • Heyman, Fredrik

    ()
    (Research Institute of Industrial Economics (IFN))

Abstract

I use Swedish establishment-level panel data to test Bertola and Rogerson’s (1997) hypothesis of a positive relation between the degree of wage compression and job reallocation. Results indicate that the effect of wage compression on job turnover is positive and significant in the manufacturing sector. The wage compression effect is stronger on job destruction than on job creation, consistent with downward wage rigidity. Further results include a strong positive relationship between the fraction of temporary employees and job turnover and a negative relationship between the amount of working-time flexibility and job reallocation.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 729.

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Length: 24 pages
Date of creation: 28 Jan 2008
Date of revision:
Handle: RePEc:hhs:iuiwop:0729

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Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Phone: +46 8 665 4500
Fax: +46 8 665 4599
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Web page: http://www.ifn.se/
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Keywords: Job Creation and Job Destruction; Wage Dispersion; Temporary Employment Contracts; Panel Data;

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