THE STRUCTURE OF WAGES AND INTERNAL MOBILITY

by Edward P. Lazear and Paul Oyer

AER Papers & Proceedings, 94, May 2004, 212-216.

ABSTRACT

Sweden has extremely detailed information about individual jobs, covering a significant fraction of the country’s economy. These data are used to analyze promotion-from-within, worker mobility, and wage setting behavior. Even in a highly unionized and regulated economy such as Sweden’s, there is considerable mobility and external hiring at all white-collar levels. There is much promotion from within, but no well-defined ports of entry. Also, short term changes in wages are affected by factors that are indiosyncratic to individual firms. In the long term, wages are determined externally, reflecting either the market or centralized bargaining.