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Firms and skills: the evolution of worker sorting

Author

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  • Håkanson, Christina

    () (Sveriges riksbank)

  • Lindqvist, Erik

    () (Stockholm School of Economics)

  • Vlachos, Jonas

    () (Department of Economics, Stockholm University)

Abstract

We document a significant increase in the sorting of workers by cognitive and non-cognitive skills across Swedish firms between 1986 and 2008. The weight of the evidence suggests that the increase in sorting is due to stronger complementarities between worker skills and technology. In particular, a large fraction of the increase can be explained by the expansion of the ICT sector and a reallocation of engineers across firms. We also find evidence of increasing assortative matching, in the sense that workers who are particularly skilled in their respective educational groups are more likely to work in the same firms. Changes in sorting pattens and skill gradients can account for a about half of their increase in between-firm dispersion.

Suggested Citation

  • Håkanson, Christina & Lindqvist, Erik & Vlachos, Jonas, 2015. "Firms and skills: the evolution of worker sorting," Working Paper Series 2015:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  • Handle: RePEc:hhs:ifauwp:2015_009
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    Cited by:

    1. Engbom, Niklas & Moser, Christian, 2018. "Earnings Inequality and the Minimum Wage: Evidence from Brazil," MPRA Paper 95384, University Library of Munich, Germany.
    2. Peter Fredriksson & Lena Hensvik & Oskar Nordström Skans, 2018. "Mismatch of Talent: Evidence on Match Quality, Entry Wages, and Job Mobility," American Economic Review, American Economic Association, vol. 108(11), pages 3303-3338, November.
    3. Hinnerich, Björn Tyrefors & Vlachos, Jonas, 2017. "The impact of upper-secondary voucher school attendance on student achievement. Swedish evidence using external and internal evaluations," Labour Economics, Elsevier, vol. 47(C), pages 1-14.
    4. Nancy L Stokey, 2016. "Technology, Skill and the Wage Structure," 2016 Meeting Papers 750, Society for Economic Dynamics.
    5. Christian Moser & Niklas Engbom, 2016. "Earnings Inequality and the Minimum Wage: Evidence from Brazil," 2016 Meeting Papers 72, Society for Economic Dynamics.
    6. Böhm, Michael & Metzger, Daniel & Strömberg, Per, 2015. "Since you’re so rich, you must be really smart”: Talent and the Finance Wage Premium," Working Paper Series 313, Sveriges Riksbank (Central Bank of Sweden).
    7. Nancy L. Stokey, 2016. "Technology, Skill and the Wage Structure," NBER Working Papers 22176, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Skill sorting; skilled-biased technological change; outsorcing; globalization; cognitive skills; non-cognitive skills; personality; employer-employee matched data;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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