IDEAS home Printed from https://ideas.repec.org/p/boc/fsug24/05.html

Hiring for old and new positions: Understanding wage formation, sorting, and

Author

Listed:
  • Dogan Gülümser

    (Uppsala University amd Uppsala Center for Labor Studies)

Abstract

This presentation explores how firms' demands for new skills (occupations) affect workers' labor market outcomes and within- and across-firms wage dispersion. I outline a stylized matching model (Jovanovic 1979) to study firms' differential responses to information frictions when hiring for new versus preexisting occupations. Firms respond to higher information frictions when creating new roles by screening more, which results in better match quality for new positions. Using matched employer–employee panel data from Sweden, I show that workers entering newly created roles within

Suggested Citation

  • Dogan Gülümser, 2024. "Hiring for old and new positions: Understanding wage formation, sorting, and," French Stata Users' Group Meetings 2024 05, Stata Users Group.
    • Handle: RePEc:boc:fsug24:05
    as

    Download full text from publisher

    File URL: http://repec.org/frsug2024/France24_Gulumser.pdf
    File Function: presentation materials
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David Card & Jörg Heining & Patrick Kline, 2013. "Workplace Heterogeneity and the Rise of West German Wage Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 967-1015.
    2. Jaime Arellano-Bover, 2024. "Career Consequences of Firm Heterogeneity for Young Workers: First Job and Firm Size," Journal of Labor Economics, University of Chicago Press, vol. 42(2), pages 549-589.
    3. Barron, John M & Bishop, John, 1985. "Extensive Search, Intensive Search, and Hiring Costs: New Evidence on Employer Hiring Activity," Economic Inquiry, Western Economic Association International, vol. 23(3), pages 363-382, July.
    4. Schmieder, Johannes F., 2023. "Establishment age and wages," Journal of Econometrics, Elsevier, vol. 233(2), pages 424-442.
    5. Bertheau, Antoine, 2021. "Employer Search Behavior: Reasons for Internal Hiring," Labour Economics, Elsevier, vol. 73(C).
    6. Barron, John M & Bishop, John & Dunkelberg, William C, 1985. "Employer Search: The Interviewing and Hiring of New Employees," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 43-52, February.
    7. Eric W. Chan & Jeremy B. Lill & Victor S. Maas, 2023. "Promote Internally or Hire Externally? The Role of Gift Exchange and Performance Measurement Precision," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 61(2), pages 493-530, May.
    8. Fatih Guvenen & Burhan Kuruscu & Satoshi Tanaka & David Wiczer, 2020. "Multidimensional Skill Mismatch," American Economic Journal: Macroeconomics, American Economic Association, vol. 12(1), pages 210-244, January.
    9. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-990, October.
    10. Luis Garicano & Esteban Rossi-Hansberg, 2015. "Knowledge-Based Hierarchies: Using Organizations to Understand the Economy," Annual Review of Economics, Annual Reviews, vol. 7(1), pages 1-30, August.
    11. Lena Hensvik & Olof Rosenqvist, 2019. "Keeping the Production Line Running: Internal Substitution and Employee Absence," Journal of Human Resources, University of Wisconsin Press, vol. 54(1), pages 200-224.
    12. Oyer, Paul & Schaefer, Scott, 2011. "Personnel Economics: Hiring and Incentives," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 20, pages 1769-1823, Elsevier.
    13. Jäger, Simon & Heining, Jörg, 2019. "How Substitutable Are Workers? Evidence from Worker Deaths," MPRA Paper 109757, University Library of Munich, Germany, revised 01 Jan 2019.
    14. M. Diane Burton & Michael S. Dahl & Olav Sorenson, 2018. "Do Start-ups Pay Less?," ILR Review, Cornell University, ILR School, vol. 71(5), pages 1179-1200, October.
    15. Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, vol. 70(6), pages 538-538.
    16. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    17. Lorenzo Caliendo & Ferdinando Monte & Esteban Rossi-Hansberg, 2015. "The Anatomy of French Production Hierarchies," Journal of Political Economy, University of Chicago Press, vol. 123(4), pages 809-852.
    18. Burdett, Kenneth & Mortensen, Dale T, 1998. "Wage Differentials, Employer Size, and Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 257-273, May.
    19. Bertheau, Antoine & Larsen, Birthe & Zhao, Zeyu, 2023. "What Makes Hiring Difficult? Evidence from Linked Survey-Administrative Data," IZA Discussion Papers 16268, IZA Network @ LISER.
    20. Charles Brown & James L. Medoff, 2003. "Firm Age and Wages," Journal of Labor Economics, University of Chicago Press, vol. 21(3), pages 677-698, July.
    21. David Card & Ana Rute Cardoso & Joerg Heining & Patrick Kline, 2018. "Firms and Labor Market Inequality: Evidence and Some Theory," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 13-70.
    22. Benjamin U. Friedrich, 2022. "Trade Shocks, Firm Hierarchies, and Wage Inequality," The Review of Economics and Statistics, MIT Press, vol. 104(4), pages 652-667, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gülümser, Dogan, 2026. "Old and new jobs: Understanding wage formation, sorting and firm behavior," Working Paper Series 2026:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    2. Dogan Gülümser, 2026. "Old and New Jobs: Understanding Wage Formation, Sorting, and Firm Behavior," RFBerlin Discussion Paper Series 26155, ROCKWOOL Foundation Berlin (RFBerlin).
    3. Jaime Arellano-Bover, 2024. "Career Consequences of Firm Heterogeneity for Young Workers: First Job and Firm Size," Journal of Labor Economics, University of Chicago Press, vol. 42(2), pages 549-589.
    4. Schmieder, Johannes F., 2023. "Establishment age and wages," Journal of Econometrics, Elsevier, vol. 233(2), pages 424-442.
    5. Brändle, Tobias & Grunau, Philipp & Haylock, Michael & Kampkötter, Patrick, 2020. "Recruitment strategies and match quality - New evidence from representative linked employer-employee data," University of Tübingen Working Papers in Business and Economics 134, University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics.
    6. Alan Manning, 2021. "Monopsony in Labor Markets: A Review," ILR Review, Cornell University, ILR School, vol. 74(1), pages 3-26, January.
    7. Tania Babina & Wenting Ma & Christian Moser & Paige Ouimet & Rebecca Zarutskie, 2019. "Pay, Employment, and Dynamics of Young Firms," Working Papers 19-23, Center for Economic Studies, U.S. Census Bureau.
    8. Benedikt Schröpf, 2023. "The dynamics of wage dispersion between firms: the role of firm entry and exit," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 57(1), pages 1-29, December.
    9. Hernandez Martinez, Victor & Holter, Hans A. & Pinheiro, Roberto, 2025. "The Hedgehog’s curse: Knowledge specialization and displacement loss," Labour Economics, Elsevier, vol. 97(C).
    10. Christopher Cornwell & Ian M. Schmutte & Daniela Scur, 2021. "Building a Productive Workforce: The Role of Structured Management Practices," Management Science, INFORMS, vol. 67(12), pages 7308-7321, December.
    11. Goller, Daniel & Brox, Enzo & Wolter, Stefan, 2026. "Imperfect Self-knowledge about Skills and Skill Mismatch," IZA Discussion Papers 18730, IZA Network @ LISER.
    12. Coraggio, Luca & Pagano, Marco & Scognamiglio, Annalisa & Tåg, Joacim, 2025. "JAQ of all trades: Job mismatch, firm productivity and managerial quality," Journal of Financial Economics, Elsevier, vol. 164(C).
    13. Di Addario, Sabrina & Kline, Patrick & Saggio, Raffaele & Sølvsten, Mikkel, 2023. "It ain’t where you’re from, it’s where you’re at: Hiring origins, firm heterogeneity, and wages," Journal of Econometrics, Elsevier, vol. 233(2), pages 340-374.
    14. David Card & Jesse Rothstein & Moises Yi, 2024. "Industry Wage Differentials: A Firm-Based Approach," Journal of Labor Economics, University of Chicago Press, vol. 42(S1), pages 11-59.
    15. Dan A. Black & Lars Skipper & Jeffrey A. Smith & Jeffrey Andrew Smith, 2023. "Firm Training," CESifo Working Paper Series 10268, CESifo.
    16. Moser, Christian & Saidi, Farzad & Wirth, Benjamin & Wolter, Stefanie, 2020. "Credit Supply, Firms, and Earnings Inequality," MPRA Paper 100371, University Library of Munich, Germany.
    17. Iacopo Morchio & Christian Moser, 2026. "The Gender Pay Gap: Micro Sources and Macro Consequences," American Economic Review, American Economic Association, vol. 116(5), pages 1765-1810, May.
    18. Jaime Arellano-Bover & Fernando Saltiel, 2026. "Differences in On-the-Job Learning across Firms," Journal of Labor Economics, University of Chicago Press, vol. 44(1), pages 149-188.
    19. Yannick Bormans & Angelos Theodorakopoulos, 2023. "Productivity dispersion, wage dispersion and superstar firms," Economica, London School of Economics and Political Science, vol. 90(360), pages 1145-1172, October.
    20. Garcia-Louzao, Jose & Ruggieri, Alessandro, 2026. "Labor market competition and inequality," Journal of Development Economics, Elsevier, vol. 183(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:boc:fsug24:05. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christopher F Baum (email available below). General contact details of provider: https://edirc.repec.org/data/stataea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.