A recent literature has used surveys of those who set wages to learn about the nature of wage incentives and the sources of wage rigidity. Methodologically, we overcome many of the objections that have been raised against this work. Substantively, we find that: (i) the reasons for real wage rigidity differ significantly between large and small firms, and between the high- and low-end of the labor market; (ii) efficiency wage mechanisms reinforce rigidities due to worker bargaining power; (iii) money illusion is a widespread phenomenon across all segments of the labor market; (iv) unions reinforce nominal wage rigidities due to external pay comparisons; (v) there appears to be gender differences in pay bargaining and work morale.

This paper uses Swedish register data to examine four classical outcomes in empirical labor economics: IQ noncognitive skills, years of schooling and long-run earnings. We estimate sibling correlations - and the variance components that define the sibling correlation - in these outcomes. We also estimate correlations for MZ-twins, who share all genes. We also extend the variance-component decomposition by accounting for birth order. We find that conventional intergenerational approaches severely underestimate the role of family background, and that future research should follow a more multidimensional approach to the study of family background.

Approximately half of Americans are employed at firms where employees are forbidden or discouraged from discussing their pay with coworkers. Employees who violate these rules may be subject to punishment or dismissal. While many employees are legally protected from reprisal under the National Labor Rights Act, the law exempts managers from these protections. Eleven states have passed laws banning pay secrecy policies for managers. In this paper, we explore what effect these state laws had on the wages and employment of managers. We find pay secrecy bans increased the wages of managers by 3.5% but had no effect on the gender wage gap, job tenure, or labor supply. The effects are heterogeneous along a number of dimensions. Below the median wage, female managers experienced a 2.9% increase in their wages relative to male managers. Above the median wage, male managers experienced a 2.7% increase in their wages relative to female managers. The wage gains were concentrated among managers employed at firms with fewer than 500 employees.

This paper studies the link between working hours and productivity using daily information on working hours and performance of a sample of call centre agents. We exploit variation in the number of hours worked by the same employee across days and weeks due to central scheduling, enabling us to estimate the effect of working hours on productivity. We find that as the number of hours worked increases, the average handling time for a call increases, meaning that agents become less productive. This result suggests that fatigue can play an important role, even in jobs with mostly part-time workers.

We use new estimators of directional rank mobility developed by Bhattacharya and Mazumder (2011) to compare rates of upward and downward intergenerational mobility across three countries: Canada, Sweden and the United States. These measures overcome some of the limitations of traditional measures of intergenerational mobility such as the intergenerational elasticity, which are not well suited for analyzing directional movements or for examining differences in mobility across the income distribution. Data for each country include highly comparable, administrative data sources containing sufficiently long time spans of earnings. Our most basic measures of directional mobility, which simply compare whether sons moved up or down in the earnings distribution relative to their fathers, do not differ much across the countries. However, we do find that there are clear differences in the extent of the movement. We find larger cross-country differences in downward mobility from the top of the distribution than upward mobility from the bottom. Canada has the most downward mobility while the U.S. has the least, with Sweden in the middle. We find some differences in upward mobility but these are somewhat smaller in magnitude. An important caveat is that our analysis may be sensitive to the concept of income we use and broader measures such as family income could lead to different conclusions. Also, small differences in rank mobility translate into rather large differences in absolute mobility measured in dollars, due to large differences in income inequality across countries.

In 2007–09, the Swedish employer-paid payroll tax was cut on a large scale for young workers, substantially reducing labor costs for this group. Using this variation in payroll taxes across ages, we estimate a significant, but small, impact both on employment and on wages, jointly implying a demand elasticity of −0.3" role="presentation">. However, it turns out that these effects vary across ages, with employment response being around four times stronger for younger workers compared to older ones. Further, we find no effects on hours worked, and there is little evidence of any lasting employment effect when workers are no longer eligible for the tax reduction.

We estimate the effects of active labor market policies on men’s crime. To do this, we exploit a local policy change in Denmark that targeted unemployed people without unemployment insurance. Our results show that crime rates decreased among treated men relative to both untreated unemployment insured and uninsured men. Lower property crime accounted for the decrease in overall crime. Increased earnings from higher employment rates cannot explain the decrease in crime. Instead, participation in the active labor market program reduced young men’s propensity to commit crime. The results suggest that active labor market programs have substantial secondary effects on criminality.

This paper aims to measure differences in risk behavior among expert chess players. The study employs a panel data set on international chess with 1.4 million games recorded over a period of 11 years. The structure of the data set allows us to use individual fixed-effect estimations to control for aspects such as innate ability as well as other characteristics of the players. Most notably, the data contains an objective measure of individual playing strength, the so-called Elo rating. In line with previous research, we find that women are more risk-averse than men. A novel finding is that men choose more aggressive strategies when playing against female opponents even though such strategies reduce their winning probability.

We study the impact of family size on intermediate and long-term outcomes using twin births as an exogenous source of variation in family size in an unusually rich dataset. Similar to recent studies, we find no evidence of a causal effect on long-term outcomes and show that not taking selection effects into account will likely overstate the effects. We do, however, find a small but significant negative impact of family size on grades in compulsory and secondary school among children who are likely to be vulnerable to further restrictions on parental investments.

We use Swedish adoption data combined with police register data to study parent-son associations in crime. For adopted sons born in Sweden, we have access to the criminal records of both the adopting and biological parents. This allows us to assess the relative importance of pre-birth factors (genes, prenatal environment and perinatal conditions) and post-birth factors for generating parent-son associations in crime. When considering the extensive margin, we find that pre-birth and post-birth factors are both important determinants of sons' convictions and that mothers and fathers contribute equally through these two channels. At the intensive margin, pre-birth factors still matter, however post-birth factors appear to dominate. In particular, adopting mothers appear to matter most for the probability that sons will be convicted of multiple crimes and/or be sentenced to prison. We find little evidence of interaction effects between biological and adoptive parents' criminal convictions. Having more highly educated adoptive parents, however, does appear to mitigate the impact of biological parents' criminality.

Girls outperform boys in school. We investigate whether the gender performance gap can be attributed to the fact that the teacher profession is female dominated, that is, is there a causal effect on student outcomes from having a same-sex teacher? Using data on upper-secondary school students and their teachers from the municipality of Stockholm, Sweden, we find that the gender performance differential is larger in subjects where the share of female teachers is higher. We argue, however, that this effect can not be interpreted as causal, mainly due to teacher selection into different subjects and non-random student-teacher matching. Exploring the fact that teacher turnover and student mobility give rise to variation in teacher's gender within student and subject, we estimate the effect on student outcomes of changing to a teacher of the same sex. We find no strong support for our initial hypothesis that a same-sex teacher improves student outcomes.

We examine the impact of educational mismatch on wages and wage growth in Sweden. The empirical analyses, based on cross-sectional and panel data from the Level of living surveys 1974–2000, are guided by two main hypotheses: (a) that educational mismatch reflects human capital compensation rather than real mismatch, and (b) that educational mismatch is real but dissolves with time spent in the labour market, so that its impact on wages tends toward zero over a typical worker's career. Our findings do not support these hypotheses. First, significant differences in contemporaneous economic returns to education across match categories remain even after variations in ability are taken into account. Second, we find no evidence that the rate of wage growth is higher among overeducated workers than others. Our conclusion is that the overeducated are penalized early on by an inferior rate of return to schooling from which they do not recover.

This paper examines the role of identification to home and host cultures on the pursuit of higher educations for individuals with immigrant backgrounds. Identity is defined according to a two-dimensional acculturation framework based on strength of identification to both ethnic background cultures and the majority culture. Results indicate that integrated men that identify with both the majority and the background culture are associated with higher probabilities of completed tertiary educations than men that identify only with the majority culture as well as men with weak affiliations to both background and majority cultures. These results hold despite controls for early education outcomes and socioeconomic status. No systematic differences in higher educational attainment by identity are found for women once differences in early education are accounted for. These results put into question the premise of oppositional identities, i.e., a trade-off between ethnic identity and higher educational achievement.

An exemption in the Swedish Employment Security Act (LAS) in 2001 made it possible for employers with a maximum of ten employees to exempt two workers from the seniority rule at times of redundancies. Using this within-country enforcement variation, the relationship between employment protection and sickness absence among employees is examined. The average treatment effect of the exemption is found to decrease sickness absence by more than 13% at those establishments that were treated relative to those that were not and this was due to a behavioral, rather than a compositional, effect. The results suggest that the exemption had the largest impact on shorter spells and among establishments with a relatively low share of females or temporary contracts.

Analysing a reform in the Swedish public sickness insurance, we find that an increased replacement rate for one spouse has a negative cross effect on the other spouse's labour supply. The cross effects are present in the labour supply margins that workers can easily adjust. For wives of treated husbands, the total number of sick days increases on average 9.1% per month, whereas labour earnings are unchanged. The cross effect on total sick days for husbands to treated wives is 6.1% on average, with no effect on annual labour earnings. The total number of sick days and annual labour earnings for treated spouses are estimated to be unaffected by the reform, which indicates that the cross effects stem specifically from higher insurance coverage for the couples.

This paper investigates the effects of job displacement on outcomes such as annual earnings, unemployment, wages and hours worked. It relies on previously unexplored administrative data on all displaced workers in Sweden in 2002, 2003 and 2004 which are linked to employer-employee matched data at the individual level. By linking the data to military enlistment records, the paper assesses the selection into displacement and finds that workers with low cognitive and noncognitive skills are significantly more likely to be displaced than high-skilled workers. The analysis of displacement effects suggests large and long-lasting welfare costs of displacement. Moreover, studying the heterogenous impacts of job displacement across cognitive and noncognitive skills reveals that, although workers with high skills fare better than low-skilled workers in absolute terms, there are no significant differences in the recovery rates across skills. Finally, by using administrative data on displacements, it is possible to assess quantitatively the bias that results from previous studies not being able to separate quits from layoffs.

In this paper we evaluate the effects of comprehensive adult education on wage earnings of long-term unemployed, an essentially unexplored issue. We use register data pertaining to a large sample of long-term unemployed in Sweden who enrolled in upper secondary comprehensive adult education. Estimates with propensity score matching indicate that more than one semester of study results in substantial increases in post program annual earnings for both males and females. According to our rough calculations, the social benefits of offering these individuals comprehensive education surpass the costs within five to seven years.

Sweden has a school voucher system with universal coverage and full acceptance of corporate providers. Using a value added approach, we find that students at upper-secondary voucher schools on average score 0.06 standard deviations lower on externally graded standardized tests in first year core courses. The negative impact is larger among lower achieving students (but not among immigrant students), the same students who are most prone to attend voucher schools. For high achieving students, the voucher school impact is around zero. Comparing internal and external evaluations of the exact same standardized tests, we find that voucher schools are 0.14 standard deviations more generous than municipal schools in their internal test grading. The greater leniency in test grading is more pronounced among students at academic than at vocational programs. The findings are consistent with voucher schools responding more strongly to differences in educational preferences than municipal schools.

In this paper we investigate whether a relaxation in seniority rules (the “last-in-first-out” principle) had any effect on firms' employment behaviour. Seniority rules exist in several countries, but consequences of seniority rules on firms' employment behaviour have not been examined previously. The “last-in-first-out” principle in Sweden was reformed in January 2001 such that employers with ten or fewer employees were allowed to exempt two workers from the seniority rule. Using an employer–employee unbalanced panel data for the period 1996–2005, we find that both hires and separations increased in small firms relative to large firms by 5%. This also implies that there were no effects on firms' net employment. Our results show that firms reacted to changes in the seniority rules, but we argue that the effects are not overwhelmingly large.

We develop a standard search-matching model in which mobility costs are so high that it is

too costly for workers to relocate when a change in their employment status occurs. We show

that, in equilibrium, wages increase with distance to jobs and commuting costs because firms

need to compensate the transportation cost difference between the employed and

unemployed workers at each location in the city. We also show that the equilibrium land rent

is negatively affected by the unemployment benefit because an increase in the latter induce

firms to create less jobs, which, in turn, reduces the competition in the land market. We then

use this model to provide a mechanism for the observed spatial mismatch between where

black workers live and where jobs are. Because blacks and whites differ by their contact rate,

we show that the former reside far away from jobs, have higher unemployment rates and

lower wages. This is because the housing market amplifies the negative effects of the labor

market by creating additional frictions.

We develop a search-matching model in which mobility costs are so high that it is too costly for workers to relocate when a change in their employment status occurs. We show that, in equilibrium, wages increase with distance to jobs and commuting costs because firms need to compensate the transportation cost difference between the employed and unemployed workers at each location in the city. We also show that the equilibrium land rent is negatively affected by the unemployment benefit because an increase in the latter induce firms to create less jobs, which, in turn, reduces the competition in the land market. We then use this model to provide a mechanism for the observed spatial mismatch between where black workers live and where jobs are. We finally show that a transportation policy consisting in subsidizing the commuting costs of black workers can increase job creation and reduce unemployment if the level of the subsidy is set at a sufficiently high level. 

Using data from the UK Quarterly Labor Force Survey, this paper examines the job finding methods of different ethnic groups in the UK. Our empirical findings suggest that, though personal networks are a popular method of finding a job for the ethnic minorities, the foreign born and those who identify themselves as non-British, they are not necessarily the most effective either in terms of gaining employment or in terms of the level of job achieved. However, there are some important differences across ethnic groups with some groups losing out disproportionately from using personal networks.

We study how age at migration affects social integration in adulthood. Using Swedish register data, we estimate the effects of age at migration by comparing siblings arriving (as children) at the same time, but at different ages. Migrants who were older when they arrived are less likely to live close to, work with, and marry natives. We also study 2nd generation immigrants and show that parental time in the host country has similar (although somewhat weaker) effects for this group. The effects do not appear to be propagated through socioeconomic status. Instead, preferences or cultural identities appear as key mechanisms.

We study the impact on long and short run criminal behavior from a large scale Swedish reform of vocational upper secondary education, extending programs and adding more general theoretical content. The reform directly concerns age groups where criminal activity is high and individuals who are overrepresented among criminal offenders. Using detailed administrative data we show that the reform led to a reduction in property crime, but no significant decrease in violent crime. The effect is mainly concentrated to the third year after enrollment, which suggests that being in school reduces the opportunities and/or inclinations to commit crime.