Working Paper Series
How Wage Compression Affects Job Turnover
Abstract: I use Swedish establishment-level panel data to test
Bertola and Rogersonís (1997) hypothesis of a positive relation between the
degree of wage compression and job reallocation. Results indicate that the
effect of wage compression on job turnover is positive and significant in
the manufacturing sector. The wage compression effect is stronger on job
destruction than on job creation, consistent with downward wage rigidity.
Further results include a strong positive relationship between the fraction
of temporary employees and job turnover and a negative relationship between
the amount of working-time flexibility and job reallocation.
Keywords: Job Creation and Job Destruction; Wage Dispersion; Temporary Employment Contracts; Panel Data; (follow links to similar papers)
JEL-Codes: J21; J31; J63; (follow links to similar papers)
24 pages, January 28, 2008
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