Worker Flows, Job Flows and Firm Wage Policies: An Analysis of Slovenia
AbstractLike many transition economies, Slovenia is undergoing profound changes in the workings of the labor market with potentially greater flexibility in terms of both wage and employment adjustment. We investigate the impact of the changing labor market for Slovenia using unique longitudinal matched employer-employee data that permits measurement of employment transitions and wages for workers and links of the workers to the firms with whom they are employed. We can thus measure worker flows and job flows in a comprehensive and integrated manner. We find a high pace of job flows in Slovenia especially for young, small, private and foreign owned firms and for young, less educated workers. While job flows have approached the rates observed in developed market economies, the excess of worker flows above job flows is lower than that observed in market economies. A key factor in the patterns of the worker and job flows is the determination of wages in Slovenia. A base wage schedule provides strict guidelines for minimum wages for different skill categories. However, firms are permitted to offer higher wages to an individual based upon the success of the worker and/or the firm. Our analysis shows that firms deviate from the base wage schedule significantly and that the idiosyncratic wage policies of firms are closely related to the observed pattern of worker and job flows at the firm. Firms with more flexible wages (measured as less compression of wages within the firm) have less employment instability and also are able to improve the match quality of its workers.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 569.
Length: 52 pages
Date of creation: Sep 2002
Date of revision:
Publication status: published in: Economics of Transition, 2003, 11 (2), 253-290
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Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
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Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Other versions of this item:
- John Haltiwanger & Milan Vodopivec, 2002. "Worker Flows, Job Flows and Firm Wage Policies: An Analysis of Slovenia," William Davidson Institute Working Papers Series 486, William Davidson Institute at the University of Michigan.
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
- P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
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