Job Creation by Firms in Denmark

In this paper we will look at job creation and destruction in firms. We will answer the question if it is the large companies that create jobs, while the smaller companies are contributing much less. Or is it the young companies that create jobs? And who destroys the most jobs? In the crisis Denmark lost 186,000 jobs in the private sector. The question is where and how could these jobs be recreated. Are these issues specific to industries or are they universal? The data used is register data on workplaces and firms for the period 1980-2007. The base unit of data is the workplace. The company (firm) is the legal entity. A company can have many sites, and one of the ways companies can grow is by expanding with multiple sites. This can happen by mergers and acquisitions but can also happen by creating "daughter workplaces". It is therefore essential to look at workplaces and firms at the same time. A complication here is that firms switch ID over time because of change of ownership, mergers and divisions. Data must be corrected so that these administrative issues will not affect the survival of firms. The data are used in a way where we can cover firm birth and firm death, spin-offs and mergers. The analysis will make it possible to differentiate between net and gross creation of jobs because we can follow each single individual in and out of jobs. We have for Denmark found that size on its own does not have a big impact, but young firms are much more likely to contribute to a positive growth. For the U.S. it has been found that the growth in jobs comes from small businesses. A closer analysis though shows that the main factor here is the firm age. Thus, it is found that young firms net create the most jobs, but they are also responsible for the most job destructions.job creation, job destruction, firm age, firm size, education, employer-employee data

Age Structure of the Workforce and Firm Performance.

In this contribution, we examine the interrelation between corporate age structures and firm performance. In particular, we address the issues, whether firms with young rather than older employees are successful and whether firms with homogeneous or heterogeneous workforces are doing well. Several theoretical approaches are discussed with respect to these questions and divergent hypotheses are derived. Using Danish linked employer-employee data, we find that both mean age and dispersion of age in firms are inversely u-shaped related to firm performance.Firm performance; Corporate age structures; Demographic change

The Intergenerational Transmission of Employers in Canada and Denmark

The intergenerational transmission of employers between fathers and sons is a common feature of labour markets in Canada and Denmark, with 30 to 40% of young adults having at some point been employed with a firm that also employed their fathers. This is strongly associated with the first jobs obtained during the teen years, but for four to about six percent it also refers to the main job in adulthood. In both countries the transmission of employers is positively associated with paternal earnings, rising distinctly and sharply at the very top of the father's earnings distribution, and has implications for the intergenerational transmission of earnings. Mobility out of the bottom has little to do with inheriting an employer from the father, while the preservation of high income status is distinctly related to this tendency. These findings stress that child adult outcomes are related to the structure of labour markets, and underscore the role of resources parents have – though information, networks, or direct control of the hiring process – in facilitating the job search of their children.intergenerational mobility, job search, equality of opportunity

Flexicurity, Wage Dynamics and Inequality over the Life-Cycle

We investigate the relationship between life-cycle wages and flexicurity in Denmark. We separate permanent from transitory wages and characterise flexicurity using membership of unemployment insurance funds. We find that flexicurity is associated with lower wage growth heterogeneity over the life-cycle and greater wage instability, changing the nature of wage inequality from permanent to transitory. While we are in general unable to formally test for moral hazard against adverse selection into unemployment insurance membership, robustness checks suggest that moral hazard is the relevant interpretation.unemployment insurance, wage dynamics, wage inequality, wage instability

Economic Satisfaction and Income Rank in Small Neighbourhoods

We contribute to the literature on well-being and comparisons by appealing to new Danish data dividing the country up into around 9,000 small neighbourhoods. Administrative data provides us with the income of every person in each of these neighbourhoods. This income information is matched to demographic and economic satisfaction variables from eight years of Danish ECHP data. Panel regression analysis shows that, conditional on own household income, respondents report higher satisfaction levels when their neighbours are richer. However, individuals are rank-sensitive: conditional on own income and neighbourhood median income, respondents are more satisfied as their percentile neighbourhood ranking improves. A ten percentage point rise in rank (i.e. from 40th to 20th position in a 200-household cell) is worth 0.11 on a one to six scale, which is a large marginal effect in satisfaction terms.income comparisons, neighbours, satisfaction, geo-coded data

Job satisfaction and co-worker wages: Status or signal?

This paper uses matched employer-employee panel data to show that individual job satisfaction is higher when other workers in the same establishment are better-paid. This runs contrary to a large literature which has found evidence of income comparisons in subjective well-being. We argue that the difference hinges on the nature of the reference group. We here use co-workers. Their wages not only induce jealousy, but also provide a signal about the worker's own future earnings. Our positive estimated coefficient on others' wages shows that this positive future earnings signal outweighs any negative status effect. This phenomenon is stronger for men, and in the private sector.Ce papier utilise des données appariées entre salariés et entreprises afin de montrer que les individus font état de niveaux de satisfaction au travail plus élevés quand les autres salariés de la même entreprise sont mieux payés. Ce résultat va à l'encontre d'une littérature importante sur le bien-être individuel qui a plutôt mis en exergue des comparaisons de revenu. Nous suggérons que la différence entre ces résultats provient de la nature du groupe de référence. Ici nous considérons des collègues au travail, dont le salaire peut induire un sentiment de jalousie, mais également informer l'individu sur son salaire futur potentiel. Le fait que le coefficient estimé sur le salaire des collègues soit positif montre que l'effet positif du signal l'emporte sur l'effet négatif du statut. Ce phénomène se trouve surtout pour les hommes et dans le secteur privé