Wage and Labor Mobility in Denmark, 1980-2000

This paper consists of three parts. First, we briefly describe some key features of the labor market in Denmark, some of which contribute to the Danish labor markets behaving quite differently from those in many other European countries. The next two parts exploit detailed linked employer-employee data. In the second part we document in some detail an important aspect of the functioning and flexibility of the labor markets in Denmark: the high level of worker mobility. We show that mobility is about as high, or even higher, as in the highly fluid U.S. labor market. Finally, we describe and examine the wage structure between and within firms and changes therein since 1980, especially with an eye on possible impacts of the trend towards a more decentralized wage determination. The shift towards decentralized wage bargaining has coincided with deregulation and increased product market competition. The evidence is, however, not consistent with stronger competition in product markets eroding firm-specific rents. Hence, the prime suspect is the change in wage setting institutions.

The Dispersion of Employees' Wage Increases and Firm Performance

In this contribution we examine the interrelation between intra-firm wage increases and firm performance. Previous studies have focused on the dispersion of wages in order to examine for the empirical dominance of positive monetary incentive effects compared to adverse effects due to fairness considerations. We argue that the dispersion of wage increases rather than wage levels is a crucial measure for monetary incentives in firms. The larger the dispersion of wage increases the higher the amount of monetary incentives in firms. In contrast, huge wage inequality without any promotion possibilities does not induce any monetary incentives. Evidence from unique Danish linked employer employee data shows that large dispersion of wage growth within firms is generally connected with low firm performance. The results are mainly driven by white collar rather than blue collar workers.Fairness, Firm performance, Inequality, Monetary Incentives, Wage increases, Wage Dispersion

Job Creation and Destruction over the Business Cycles and the Impact on Individual Job Flows in Denmark 1980-2001

Job creation and destruction should be considered as key success or failure criteria of the economic policy. Job creation and destruction are both effects of economic policy, the degree of out- and in-sourcing, and the ability to create new ideas that can be transformed into jobs. Job creation and destruction are results of businesses attempting to maximize their economic outcome. One of the costs of this process is that employees have to move from destroyed jobs to created jobs. The development of this process probably depends on labor protection laws, habits, the educational system, and the whole UI-system. A flexible labor market ensures that scarce labor resources are used where they are most in demand. Thus, labor turnover is an essential factor in a well-functioning economy. This paper uses employer-employee data from the Danish registers of persons and workplaces to show where jobs have been destroyed and where they have been created over the last couple of business cycles. Jobs are in general destroyed and created simultaneously within each industry, but at the same time a major restructuring has taken place, so that jobs have been lost in Textile and Clothing, Manufacturing and the other “old industries”, while jobs have been created in Trade and Service industries. Out-sourcing has been one of the causes. This restructuring has caused a tremendous pressure on workers and their ability to find employment in expanding sectors. The paper shows how this has been accomplished. Especially, the paper shows what has happened to employees involved. Have they become unemployed, employed in the welfare sector or where?job creation and job destruction; turnover of personnel; duration of unemployment; and impact of business cycles

Where did they go?

We study individual job-separations and their associated destination states for all individuals in the private sector in Denmark for the period 1980 to 1995 and account for the cyclical flows. We find that individual and workplace characteristics as well as business cycle effects are important in explaining the individual behaviour. In policy simulations we look at the impact on individual transitions. We find that structural and growth policies have different implications for the economy. Policy interventions with the purpose of preventing firm closures are argued to be inefficient.Business cycles; Job separations; Transition probabilities

Adverse Workplace Conditions, High-Involvement Work Practices and Labor Turnover: Evidence from Danish Linked Employer-Employee Data

This paper contributes to the emerging strand of the empirical literature that takes advantage of new data on workplace-specific job attributes and voluntary employee turnover to shed fresh insights on the relationship between employee turnover, adverse workplace conditions and HRM environments. We find evidence that workers in hazardous workplace conditions are indeed more likely to separate from their current employers voluntarily while High-Involvement Work Practices (HIWPs) reduces employee turnover. Specifically, exposing a worker to physical hazards such as loud noise, vibration or poor lighting will lead to a 3 percentage point increase in the probability of turnover from the average turnover rate of 18 percent; working in a fixed night shift will result in an 11 percentage point jump in the turnover probability, and having an unsupportive boss will lead to a 5 percentage point increase. The effect of HIWPs is modest yet hardly negligible with a 4 percentage point reduction in the turnover probability from having voice in the workplace. Furthermore the turnover-increasing effect of physical hazards is found to be significantly reduced by the presence of strong information sharing whereas the adverse effect on turnover of the use of fixed night shift is also found to be significantly mitigated by the authority delegation to workers by management. As such, our evidence lends support to those who advocate the use of HIWPs for those firms with employee turnover problems due to hazardous workplace conditions. Finally, our logit analysis of the 5-year odds of improving workplace conditions suggests that the worker exposed to adverse workplace conditions can improve her long-term odds of rectifying such workplace adversities significantly by separating from the firm voluntarily. Voluntary turnover appears to be a rational worker response to adverse workplace conditions, and unless the firm alleviates its adverse workplace conditions directly or mitigates their effects on voluntary turnover through HIWPs, workers exposed to adverse workplace conditions will likely continue to take the exit option.employee turnover, workplace conditions, human resource management, high-involvement work system, high-performance work system

Job Mobility and Skill Transferability. Some Evidences from Denmark and a Large Italian Region

This paper investigates the effect of job mobility and tenure on wage dynamics. In this respect, theory assesses that high job mobility and low tenure are associated to lower wage drop when workers experience a job change. We test this theory first comparing two labour market (i.e. Denmark and a large Italian region, Veneto) characterized by different job mobility and tenure, as a consequence of different level of EPL. Secondly, we perform a within Veneto analysis, comparing the different effects when workers are employed in small rather than big firms. Data drawn from the VWH (Veneto Workers History) and IDA (for Denmark) registered data, from 1987 to 2001, are used. In Denmark job mobility has a positive effect on wage increases, while built up on firm-specific human capital has a negative effect. In Veneto, instead, it appears that long tenure are more rewarding. Some evidences of positive impact of moving from job to job when the barriers are lower come from the analysis of the differences between small and big firms in Veneto.Information sale, Cheap talk, Conflicts of interest, Information Acquisition, Firewalls, Market efficiency

Global measure of satisfaction with psychosocial work conditions versus measures of specific aspects of psychosocial work conditions in explaining sickness absence

<p>Abstract</p> <p>Background</p> <p>Attempts to identify particular aspects of psychosocial work conditions as predictors of sickness absence remain inconclusive. A global measure has previously been suggested to be an efficient way to measure psychosocial work conditions in questionnaires. This paper investigates whether satisfaction with specific aspects of psychosocial work conditions explains sickness absence beyond its association with a global measure of psychosocial work conditions.</p> <p>Methods</p> <p>The participants were 13,437 employees from 698 public service workplaces in Aarhus County, Denmark. 33 items from a questionnaire fell in groupings around six aspects of psychosocial work conditions: skill discretion, professionalism, management, decision authority, workload and cooperation. A global measure rating satisfaction with psychosocial work conditions on a scale from 0 to 10 was also included in the questionnaire. Individual ratings were aggregated to workplace scores. Analysis of variance and multiple linear regression was used to compare the average number of days of yearly sickness absence with different levels of satisfaction with six aspects of psychosocial work conditions. The covariates included were gender, age, occupation, size of workplace, contact to hospital, civil status and children below 13 living at home.</p> <p>Results</p> <p>Dissatisfaction with each of the six aspects of psychosocial work conditions was associated with an increase in sickness absence. When all aspects were simultaneously included in the model, only skill discretion and professionalism were negatively associated with sickness absence. When a global measure of satisfaction with psychosocial work conditions was also included in the model none of the specific aspects showed a statistically significant association with sickness absence.</p> <p>Conclusion</p> <p>Low global satisfaction with psychosocial work conditions is associated with increased levels of sickness absence. Including specific aspects of psychosocial work conditions in the model does not provide further information regarding the nature of this association.</p

Psychosocial work environment and antidepressant medication: a prospective cohort study

<p>Abstract</p> <p>Background</p> <p>Adverse psychosocial work environments may lead to impaired mental health, but it is still a matter of conjecture if demonstrated associations are causal or biased. We aimed at verifying whether poor psychosocial working climate is related to increase of redeemed subscription of antidepressant medication.</p> <p>Methods</p> <p>Information on all antidepressant drugs (AD) purchased at pharmacies from 1995 through 2006 was obtained for a cohort of 21,129 Danish public service workers that participated in work climate surveys carried out during the period 2002–2005. Individual self-reports of psychosocial factors at work including satisfaction with the work climate and dimensions of the job strain model were obtained by self-administered questionnaires (response rate 77,2%). Each employee was assigned the average score value for all employees at his/her managerial work unit [1094 units with an average of 18 employees (range 3–120)]. The risk of first-time AD prescription during follow-up was examined according to level of satisfaction and psychosocial strain by Cox regression with adjustment for gender, age, marital status, occupational status and calendar year of the survey.</p> <p>Results</p> <p>The proportion of employees that received at least one prescription of ADs from 1995 through 2006 was 11.9% and prescriptions rose steadily from 1.50% in 1996 to the highest level 6.47% in 2006. ADs were prescribed more frequent among women, middle aged, employees with low occupational status and those living alone. None of the measured psychosocial work environment factors were consistently related to prescription of antidepressant drugs during the follow-up period.</p> <p>Conclusion</p> <p>The study does not indicate that a poor psychosocial work environment among public service employees is related to prescription of antidepressant pharmaceuticals. These findings need cautious interpretation because of lacking individual exposure assessments.</p