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Wage Dispersion and Job Turnover: Evidence from Sweden


  • Heyman, Fredrik

    (Trade Union Institute for Economic Research)


This paper uses Swedish establishment-level panel data to test the hypothesis of a positive relation between the degree of wage compression and job reallocation as proposed by Bertola and Rogerson (1997). The effect of wage dispersion on job turnover is negative and significant in the manufacturing sector. The wage com-pression effect is stronger on job destruction than on job creation, suggesting that wages are more downward than upward rigid. 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.

Suggested Citation

  • Heyman, Fredrik, 2002. "Wage Dispersion and Job Turnover: Evidence from Sweden," Working Paper Series 181, Trade Union Institute for Economic Research.
  • Handle: RePEc:hhs:fiefwp:0181 Note: This paper is Chapter 2 of my 2002 Stockholm School of Economics Ph.D. thesis.

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    References listed on IDEAS

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    Cited by:

    1. Gomez-Salvador, Ramon & Messina, Julian & Vallanti, Giovanna, 2004. "Gross job flows and institutions in Europe," Labour Economics, Elsevier, vol. 11(4), pages 469-485, August.
    2. Lundborg, Per, 2005. "Wage Fairness, Growth and the Utilization of R&D Workers," Working Paper Series 206, Trade Union Institute for Economic Research.
    3. Lundborg, Per, 2005. "Wage Theories for the Swedish Labour Market," Working Paper Series 207, Trade Union Institute for Economic Research.
    4. Selén, Jan & Ståhlberg, Ann-Charlotte, 2004. "Wage and Compensation Inequality — How Different?," Working Paper Series 197, Trade Union Institute for Economic Research.

    More about this item


    Job creation and job destruction; Wage dispersion; Temporary employment contracts; Panel data;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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