SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

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.

JEL-codes: J21; J31; J63

23 pages, October 22, 2001

Full text files

hastef0479.pdf  (221kB) 

Download statistics

Published as

Fredrik Heyman, (2008), 'How Wage Compression Affects Job Turnover', Journal of Labor Research, vol 29, pages 11-26

• Stockholm School of Economics
• Home page for this series

Questions (including download problems) about the papers in this series should be directed to Helena Lundin ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:hhs:hastef:0479This page generated on 2024-09-13 22:15:06.