Linked Employer Employee Dataset Research Articles

The impacts of working from home on individual health and well-being

Using a novel German linked employer–employee dataset, we provide unique evidence about the consequences of working from home (WfH) on individual health and well-being. During the recent pandemic, this locational flexibility measure has been used extensively to promote health by hampering the spread of the virus and to secure jobs. However, its direct theoretical ambiguous effects on health and well-being as characterized by different potential channels have barely been empirically investigated to date despite WfH’s increasing popularity in the years before the pandemic. To address concerns about selection into WfH in our dataset that is unaffected by the COVID-19 shock, our analysis relies on an identification strategy ruling out confounding effects by time-invariant unobservable variables. Moreover, we explain the remaining (intertemporal) variation in the individual WfH status by means of an instrumental variable strategy using variation in equipment with mobile devices among establishments. We find that subjective measures of individual health are partly affected by WfH, whereas no corresponding effect is present for an objective measure of individual health. In terms of individual well-being, we find that WfH leads to considerable improvement. By addressing the potential heterogeneity in our effect of interest, we find that men and middle-aged individuals particularly benefit from WfH.

Wage differences according to workers' origin: The role of working more upstream in GVCs

AbstractThis article examines the impact of a firm's position in Global Value Chains (GVCs) on wages according to workers' origin. Based on a unique linked employer–employee dataset regarding the Belgian manufacturing industry covering the 2002–2010 timespan, our estimates show that firms that are more upstream in the value chain pay on average significantly higher wages. However, the wage premium associated with upstreamness is also found to be unequally shared among workers. Unconditional quantile regressions and decomposition methods suggest that high‐wage workers born in developed countries benefit the most from being employed higher up the value chain, while workers born in developing countries appear to be unfairly rewarded.

Wage dispersion in Italy

This article analyzes wage dispersion in a sample of Italian firms, by taking advantage of a unique Linked Employer-Employee dataset (LEED) merging four data sources from the National Institute of Statistics. An in-depth descriptive analysis conveys that knowledge-intensive services record the highest within- and between-firms wage dispersion in the sample. Regression-based results show that innovation does not drive up inequality in large companies. However, it can contribute to enlarge the within-firm wage dispersion as well as the wage gap across small firms.

The stress and resources of higher status hypotheses in light of COVID-19: Effects on work-life conflict and self-rated health

This paper explores the heterogeneous effects of the COVID-19 pandemic on employees’ well-being regarding their work–life conflicts and self-rated health. Following the stress of higher status and resources of higher status hypotheses, we compared employees with and without supervisory responsibility. We used the third wave of a longitudinal linked employer–employee dataset (LEEP-B3) conducted in 2018/19 and a COVID-19 follow-up survey conducted in late 2020, providing information on 733 employees in establishments having more than 500 employees. Thus, we provide a longitudinal perspective covering the situation before the pandemic and possible pandemic-induced changes. We found that supervisory responsibility offered a comparative advantage for decreasing work–life conflict during the pandemic, but no such difference was detected among non-supervisors. However, there was no significant difference between employees with and without supervisory responsibility for self-rated health. Self-rated health status decreased during the pandemic in both groups to a similar degree. Our results indicate that having supervisory responsibility during the COVID-19 pandemic can be a double-edged sword, acting as both a resource and a stressor when it comes to employees’ work-life conflict and self-rated health.

The stress and resources of higher status hypotheses in light of COVID-19: Effects on work-life conflict and self-rated health (Online-Appendix)

This paper explores the heterogeneous effects of the COVID-19 pandemic on employees’ well-being regarding their work–life conflicts and self-rated health. Following the stress of higher status and resources of higher status hypotheses, we compared employees with and without supervisory responsibility. We used the third wave of a longitudinal linked employer–employee dataset (LEEP-B3) conducted in 2018/19 and a COVID-19 follow-up survey conducted in late 2020, providing information on 733 employees in establishments having more than 500 employees. Thus, we provide a longitudinal perspective covering the situation before the pandemic and possible pandemic-induced changes. We found that supervisory responsibility offered a comparative advantage for decreasing work–life conflict during the pandemic, but no such difference was detected among non-supervisors. However, there was no significant difference between employees with and without supervisory responsibility for self-rated health. Self-rated health status decreased during the pandemic in both groups to a similar degree. Our results indicate that having supervisory responsibility during the COVID-19 pandemic can be a double-edged sword, acting as both a resource and a stressor when it comes to employees’ work-life conflict and self-rated health.

What Works? How Combining Equal Opportunity and Work–Life Measures Relates to the Within-Firm Gender Wage Gap

In this paper, we investigate how organizational equal opportunity and work–life measures when combined are associated with the gender wage gap within large German establishments. By looking at both kinds of measures as parts of a comprehensive personnel strategy, we provide a novel way to distinguish between a career-supportive implementation of work–life measures versus implementation as a compensating differential. Using a linked employer–employee dataset, we performed a cross-sectional multilevel regression analysis with fixed effects for 6439 respondents within 122 establishments. The results indicate that work–life measures that support employees in their parenthood responsibilities are linked to a significantly higher GWG, particularly for parents. Our results indicate that the implementation of work–life measures is used as compensating differentials, primarily for mothers. Particularly, this can be found when looking at the combination of multiple measures. In combination with equal opportunity measures for women, work–life measures that highlight the long-term absence from the workplace are associated with a higher GWG for parents.

Innovative competences, the financial crisis and firm-level productivity in Denmark and Finland

ABSTRACT This paper examines how intangible assets contribute to firm-level productivity in the small open economies of Denmark and Finland from 2000 to 2013. We examine whether the role of intangible assets has changed over time, from the period of fairly stable growth prior to the crisis in 2008 to the more difficult period of recovery afterwards where intangible capital deepening decreased in 2008–2013 in many European countries. The productivity analysis is conducted in two stages. First, we derive total factor productivity (TFP), and second, we estimate the effects of intangible assets on total factor productivity. Our approach for measuring intangible assets is based on occupational classifications in a linked employer–employee dataset. We construct measures for three types of intangibles: broad R&D assets (R&D), organizational assets (OC) and information and communication technology assets (ICT). In both countries, the TFP effects of broad R&D increase slightly in the period after the crisis. For Finland, we also find that the TFP effects of OC increase after the crisis, while Denmark experienced a considerable increase in OC assets after financial crises in intangible intensive industries such as information, education and health industries, where productivity is lower.

Offshoring Brains? Evidence on the Complementarity between Manufacturing and R&D in Danish Firms*

AbstractBy employing a firm‐level linked employer–employee dataset for Danish manufacturing firms, this paper investigates whether offshoring is complementary to, or a substitute for, research and development (R&D) activities. Offshoring is instrumented with world export supply to circumvent the inherent endogenous nature of the firm's decision to offshore. Results suggest that firms with increased offshoring do in fact tend to engage in further R&D activities at home. Moreover, they also tend to reallocate R&D resources toward product R&D, possibly at the expense of process R&D.

Knowledge Intensity and Gender Wage Gaps: Evidence from Linked Employer-Employee Data

Do knowledge intense jobs exhibit lower gender gaps in wages? Here we use a linked employeremployee dataset of the entire Brazilian formal labor force to study the relationship between gender wage gaps and the knowledge intensity of industries and occupations. We find that employees in high-skilled occupations and industries experience lower gender wage gaps, and that the effect of knowledge intensity is stronger when the demand for skilled labor is high and the supply of skilled labor is low. We also find evidence that the gender wage gap of skilled workers, but not that of unskilled workers, decreases when knowledge intense industries grow. These effects are robust to controlling for individual, occupation, sector, and location characteristics. To address endogeneity concerns, we use a Bartik instrument based on labor demand shocks. Together, these findings suggest that competition for skilled labor in knowledge intense industries contributes to the reduction of gender wage gaps.

Who Works for Whom and the UK Gender Pay Gap

AbstractThis study reports novel facts about the UK gender pay gap. We use a representative, longitudinal and linked employer–employee dataset for 2002–2016. Men's average log hourly wage was 22 points higher than women's in this period. We find that 16 per cent of this raw pay gap is accounted for by estimated firm‐specific wage effects. This is almost three times the amount explained by gender occupation differences. When we decompose a pre‐adjusted measure of the pay gap, we find less than 1 percentage point or a 6 per cent share is accounted for by the gender allocation across high‐ and low‐wage firms. In other words, only a small share of what is traditionally referred to as the ‘unexplained’ part of the pay gap is explained by the differences between men and women in whom they work for.

Do Women Managers Lower Gender Pay Gaps? Evidence from Public and Private Firms

ABSTRACTThis paper analyzes the link between the share of women managers and the size of the firm-level gender pay gap, looking separately at the private and public sectors. Using a large linked employer–employee dataset for Poland and nonparametric and parametric decompositions, the study finds that a greater share of women managers is associated with an increased advantage for women in selected types of public-sector units: the ones in which remunerations of women and men are already equal, and a large share of the workforce is tertiary-educated. The effects are, however, relatively small in size. In private establishments, lower gender wage inequality is associated with higher shares of women workers, but not women managers.

The Impact of Investments in New Digital Technologies on Wages – Worker-Level Evidence from Germany

AbstractThe strong rise of digitalization, automation, machine learning and other related new digital technologies has led to an intense debate about their societal impacts. The transitions of occupations and the effects on labor demand and workers’ wages are still open questions. Research projects dealing with this issue often face a lack of data on the usage of new digital technologies. This paper uses a novel linked employer–employee data set that contains detailed information on establishments’ technological upgrading between 2011 and 2016, a recent period of rapid technological progress. Furthermore, we are the first to develop a digital tools index based on the German expert database BERUFENET. The new index contains detailed information on the work equipment that is used by workers. Hence, we observe the degree of digitalization on both the establishment level and the worker level. The data allow us to investigate the impact of technology investments on the wage growth of employees within establishments. Overall, the results from individual level fixed effects estimates suggest that investments in new digital technologies at the establishment level positively affect the wages of the establishments’ workers. Sector-specific results show that investments in new digital technologies increase wages in knowledge intensive production establishments and non-knowledge intensive services. The wage growth effects of employees indigital pioneerestablishments relative to the specific reference group of workers indigital latecomerestablishments are most pronounced for low- and medium-skilled workers.

Recent Changes in British Wage Inequality: Evidence from Large Firms and Occupations

AbstractUsing a linked employer–employee dataset covering large firms, we present new evidence on British wage inequality trends over the past two decades. Differences between firms in the average wages they paid did not drive these trends. Between 1996 and 2005, greater wage variance within firms accounted for 86% of the total increase in wage variance among employees. In the following decade, wage inequality between firms continued to increase, whereas overall wage dispersion decreased. Approximately all the contribution to inequality dynamics from estimated firm‐specific factors, throughout the employee wage distribution, disappears after accounting for the changing occupational content of wages.

When do firms evaluate further training measures?

PurposeIncreased investments in employee further training have resulted in a growing interest in ensuring and improving the quality of these measures. However, little is known about the operational decision to initiate an evaluation of further training. Therefore, the purpose of this paper is to investigate under which circumstances firms decide to evaluate training measures.Design/methodology/approachThe study analyzes the evaluation decision of firms and external suppliers, and differentiates between internal and external further trainings. Theoretically, two goals of evaluations – monitoring and feedback – and their relevance for the decision makers are considered. Using a unique linked employer–employee data set, the study employs multi-level models to analyze three influencing factors on the evaluation decision: characteristics of the further training measure itself, the employees and the employers.FindingsThe results show that evaluation decisions are not based on general organizational practices but on case-by-case cost-benefit considerations. Interestingly, firms are more likely to evaluate internal further training measures than external ones. Therefore, evaluations seem to be more frequently used as a feedback instrument than for the purpose of monitoring. For external further training measures, firms seem to trust market mechanisms as a monitoring instrument, instead of conducting an internal evaluation.Originality/valueAlthough further training has become increasingly important, little is known about firms’ quality management in this respect. This paper provides a theoretical framework for the usage of evaluation procedures and analyzes firms’ strategies for ensuring quality based on a large set of variables to give new insight into the organizational decision-making processes.

Profit sharing and firm profitability

PurposeThis purpose of this paper to examine how profit sharing depends on the underlying profitability of firms. More precisely, motivated by theoretical research on fair wages and unionized labor markets, profit sharing is estimated for six different profitability categories: positive, increasing, positive and increasing, negative, decreasing and negative or decreasing.Design/methodology/approachThe paper exploits a high-quality linked employer–employee data set covering the universe of Finnish workers and firms. Endogeneity of profitability and self-selection of firms in different profitability categories are accounted for by an instrumental variables approach. The panel-structure of the data is used to control for unobserved heterogeneity (spell and individual fixed effects).FindingsProfits are shared if firms are profitable or become more profitable. The wage-profit elasticity varies between 0.03 and 0.13 in such firms. However, profits are not shared if firms make losses or become less profitable. There is no downward wage adjustment.Research limitations/implicationsBecause of the instrumental variables approach the question of external validity arises. Further empirical research on profit sharing with an explicit focus on firm profitability is warranted. The results of the paper indicate a connection between rent sharing and wage rigidity, as suggested by union and fair wage theory.Originality/valueThis is the first paper to consistently estimate the extent of profit sharing depending on the underlying profitability of firms.

Monopsonistic competition, low-wage labour markets, and minimum wages – An empirical analysis

ABSTRACTThis article investigates the degree of monopsony power of employers in different industries against the background of a statutory minimum wage introduction in Germany in January 2015. A semi-structural estimation approach is employed based on a dynamic model of monopsonistic competition. The empirical analysis relies on a linked employer–employee data set which allows to control for observed heterogeneity both on the worker and on the firm side. The results show important differences in monopsonistic competition among low-wage industries: While retailing, the hotel and restaurant industry as well as agriculture can be described as monopsonistic labour markets, this is not true for other services and manufacturing of food products. From a policy point of view, the introduction of a uniform minimum wage may therefore lead to different employment reactions in industries with a similar minimum wage bite.

High wage workers and high wage peers

This paper investigates the effect of coworker characteristics on wages, measured by the average person effect of coworkers in a wage regression. The effect of interest is identified from within-firm changes in workforce composition, controlling for person effects, firm effects, and sector-specific time trends. My estimates are based on a linked employer employee dataset for the population of workers and firms of the Italian region of Veneto for years 1982-2001. I find that a 0.1 increase in the average labour market value of coworkers’ skills (which is around one within-person standard deviation) is associated with a 3.6 percent wage premium. I also find that a sizeable share of the wage variation previously explained by unobserved individual and firm heterogeneity may be due to variation in coworker skills. An event-type study, a Placebo exercise and a series of heterogeneity analyses lend credibility to the baseline results. I also evaluate the role of the spillover effects for wage differentials between specific groups of workers. I find that around 12 percent of the gender wage gap and 10 to 16 percent of the immigrant wage gap can be explained by differences in coworker characteristics.

Works council introductions in Germany: Do they reflect workers’ voice?

While most previous studies focus on the monopoly aspect of works council introductions, this article explores the collective voice face of introductions and investigates workers’ decision as an exit–voice consideration. Using a large linked employer–employee dataset from Germany, the present study finds that council introductions are more likely if workers have high plant-specific human capital or earn high wages. These results are consistent with exit–voice considerations as well as with attempts to protect an existing distribution of rents. Redoing the analysis for plants in which the protection of rents against management decisions is less relevant yields similar results supporting a voice interpretation.

Estimating the Wage Premium of Collective Wage Contracts: Evidence from Longitudinal Linked Employer–Employee Data

Using a large‐scale linked employer–employee dataset from western Germany, this paper presents new evidence on the wage premium of collective bargaining contracts. In contrast to previous studies, we seek to assess the extent to which differences in wages between workers in covered and uncovered firms arise from the nonrandom selection of workers and firms into collective bargaining coverage. By measuring the relative wage changes of workers employed in firms that change contract status, we obtain estimates that depart considerably from previous results relying on cross‐sectional data. Results from analyzing separate transitions show that leaving industry‐level contracts is associated with subsequent wage losses. However, the results from a trend‐adjusted difference‐in‐difference approach indicate that particularly the transitions to no coverage appear to be associated with negative shocks. Overall, our findings provide no evidence of a “true” wage effect of leaving wage bargaining, once we account for differences in pretransition wage growth.

Everybody needs good neighbors? Labor mobility costs, cities and matching

We develop an assignment model for a city with central and suburban labor markets connected by commuting. We show that not all workers benefit from the agglomeration economies created by the dense central business district. Low-skilled workers in the suburban district are worse off by being close to the dense central business district. High-skilled workers gain more from the urban scale. The existence of labor mobility costs induces only high-skilled workers in the suburbs to commute to the central business district, which results in a decrease in the local contact efficiency for the left-behind low-skilled workers. The empirical evidence from a Belgian linked employer–employee dataset confirms this novel finding.