SSE/EFI Working Paper Series in Economics and Finance
No 479:
Wage Dispersion and Allocation of Jobs
Fredrik Heyman ()
Abstract: This paper use Swedish establishment-level panel data on
job turnover and wages to test the hypothesis of a positive relation
between job reallocation and wage compression as proposed by Bertola &
Rogerson (1997). The effect of wage dispersion on job turnover is negative
and significant in the manufacturing sector. The wage compression effect is
stronger on job destruction than on job creation, suggesting that wages are
more rigid downward than upward. For the service sector results are
reversed. 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. The estimation method is industry fixed-effect models
that control for sector heterogeneity.
Keywords: Job creation and job destruction; Wage dispersion; Temporary employment contracts.; (follow links to similar papers)
JEL-Codes: J21; J31; J63; (follow links to similar papers)
23 pages, October 22, 2001
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- This paper is published as:
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Heyman, Fredrik, (2008), 'How Wage Compression Affects Job Turnover', Journal of Labor Research, Vol. 29, pages 11-26
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