Matched Employer-employee Data Research Articles

Categorical Matching as an Organizational Condition for Gender Inequality in the Korean Labor Market

This study investigated the role of a particular organizational mechanism called categorical matching—that is, the matching of a functional category (employment status) to a social category (gender) in organizations’ allocative processes. Using large-scale employer-employee matched data, we attempted to identify the organizational characteristics that are susceptible to categorical matching and the impacts of categorical matching on the gender wage gap. We found a significant association between the degree of categorical matching and the bargaining power of female workers net of the other organizational characteristics. Moreover, we found that the residual gender wage gap is larger in establishments that engage in more extensive categorical matching. Regardless of employment status, female workers experience greater wage penalties when they work in workplaces that match men to standard jobs and women to nonstandard jobs. These findings shed light on the importance of organizational processes in producing the gender wage gap and help explain the remarkably high gender wage gap in Korea.

Exchange rate risk and the skill composition of labor

This paper uses matched employer–employee data covering the universe of Swedish private sector firms 1998–2014 to examine the links between exchange rate risk and the skill composition of labor in firms. We use firm times export destination and firm times import origin data to calculate firm-level measures of real exchange rate risk and real effective exchange rates. Our main result is that firms facing higher exchange rate risk employ a higher share of skilled labor and that the effect is especially marked among trade intensive firms in manufacturing and in firms with fewer than 50 employees. This finding is consistent with theoretical models of flexible work systems that require higher skill levels as a way of responding to higher risk.

The Impact of Immigration on Firm-Level Offshoring

This paper studies the relationship between immigration and offshoring by examining whether an influx of foreign workers reduces the need for firms to relocate jobs abroad. Using a Danish natural experiment and their employer-employee matched data set covering the universe of workers and firms (1995–2011), our findings show that an exogenous influx of immigrants into a municipality reduces firm-level offshoring at both the extensive and intensive margins. While the multilateral relationship is negative, a subsequent bilateral analysis shows that immigrants have connections in their country of origin that increase the likelihood that firms offshore to that particular foreign country.

Train to retain: Training opportunities, positive reciprocity, and expected retirement age

This article contributes to research on older workers' sustainable employment by investigating the relation between training and expected retirement age. Past research has produced inconsistent findings, partly because studies rarely distinguish between the effects of training opportunities and actual training participation. To address this limitation, we examine the incremental effect of training opportunities over and above actual training participation. Grounded in social exchange theory, we argue that the effect of training opportunities on expected retirement age depends on employees' positive reciprocity orientation. Using matched employer–employee data (880 employees matched to 284 employers) our findings show that training opportunities associate with expected retirement age over and above employees' actual training participation, but only for employees with strong positive reciprocity beliefs. Moreover, a supplementary analysis showed that the strengthening effect of positive reciprocity only holds for organizations that are financially healthy. These findings are consistent with the idea that positive reciprocators will only avoid early retirement as a response to training opportunities when it is seen as a credible gesture to facilitate employees' future employability.

Upstreamness, Wages and Gender: Equal Benefits for All?

AbstractThis article provides first evidence on the impact of a direct measure of firm‐level upstreamness (i.e. the steps before the production of a firm meets final demand) on workers’ wages. It also investigates whether results vary along the earnings distribution and by gender. Findings, based on unique matched employer–employee data relative to the Belgian manufacturing industry for the period 2002–2010, show that workers earn significantly higher wages when employed in more upstream firms. Yet, the gains from upstreamness are found to be very unequally shared among workers. Unconditional quantile estimates suggest that male top earners are the main beneficiaries, whereas women, irrespective of their earnings, appear to be unfairly rewarded. Quantile decompositions further show that these differences in wage premia account for a substantial part of the gender wage gap, especially at the top of the earnings distribution.

Consumption Network Effects

AbstractIn this article we study consumption network effects. Does the consumption of our peers affect our own consumption? How large is such effect? What are the economic mechanisms behind it? We use administrative panel data on Danish households to construct a measure of consumption based on tax records on income and assets. We combine tax record data with matched employer–employee data to identify peer groups based on workplace, which gives us a much tighter and credible definition of networks than used in previous literature. We use the non-overlapping network structure of one’s peers group, as well as firm-level shocks, to build valid instruments for peer consumption. We estimate non-negligible and statistically significant network effects, capable of generating sizable multiplier effect at the macro-level. We also investigate what mechanisms generate such effects, distinguishing between intertemporal and intratemporal consumption effects as well as a more traditional risk sharing view.

Language Premium Myth or Fact: Evidence from Migrant Workers of Guangdong, China

Using unique matched employer-employee data from China, we discover that migrant workers in the manufacturing industry who are proficient in the local dialect earn lower wages than those who are not. We also find that workers with better dialect skills are more likely to settle for lower wages in exchange for social insurance. We hypothesize that they are doing so in the hope of obtaining permanent residency and household registration status (Hukou) in the host city where they work. Further tests show that the phenomenon of “exchanging wages for social insurance participation” is more pronounced among workers employed in smaller enterprises. Moreover, migrant workers with better language skills have a stronger desire to stay in the host city. Our conclusions are robust to different specifications, even after addressing the endogeneity issue for language acquisition. The present study provides a new perspective on the impact of language fluency on social integration among migrants, one of the most disadvantaged groups in developing countries.

Levelling the Playing Field: The Effects of Slovenia’s 2013 Labour Market Reform

The paper examines the effects of the 2013 labour market reform in Slovenia which made permanent contracts less restrictive and fixed-term contracts more restrictive. Using matched employer-employee data, the differences in the outcomes for workers employed under permanent vs. fixed-term contracts before and after the legislative change are compared. The results show that the reform was successful in both reducing labour market segmentation and improving access to jobs for vulnerable groups: (i) it increased the probability of accessing permanent jobs via transitions from both fixed-term jobs and unemployment, and (ii) it improved the accessibility of permanent jobs for both young and older workers. DOI: 10.15458/85451.81

Apprenticeship as a stepping stone to better jobs: Evidence from Brazilian matched employer-employee data

The objective of this paper is to evaluate the Brazilian Apprenticeship program adopted at a large scale since 2000. In particular, we investigate whether the program is a better stepping stone to permanent jobs when compared to other forms of temporary jobs. Similar to other apprenticeship initiatives around the world, the Brazilian program trains young workers under special temporary contracts aiming to help them successfully complete the transition from school to work. We make use of a matched employee-employer dataset covering all formal employees in Brazil, including apprentices. Our identification strategy exploits a discontinuity in the eligibility to enter the program in the early 2000s, when 17 was the age limit to take part in the program. This strategy allows us to consider selection based on unobservable characteristics. We find that the program increases the probability of employment in permanent jobs and decreases turnover rates and formal labor market experience in 2-3- and 4-5-year horizons. These results are consistent with a positive effect of the program on reservation utilities of workers and on their efforts to expand skills. This is also confirmed by the data as we find substantial impacts on schooling attainment. We also find evidence that the skill requirements of the apprentices’ occupation affect the likelihood of obtaining an open-ended job in the short run and the education achievement in the medium run. The results also evince much larger effects of the program for workers who had their first job in large firms.

Occupational Composition Within Multinational Firms: Evidence From Korean Employer-Employee Matched Data

ABSTRACTUsing Korean employer-employee matched data, we investigate the difference in occupational structure between domestic and multinational firms in manufacturing sectors. The main result shows that the occupational composition of the multinational firms is more skewed toward high-skills and service occupations than domestic firms. Furthermore, we find the heterogeneous labour structure among multinational firms upon types and locations of foreign affiliates. The multinationals that are establishing production plants or locating their affiliates in emerging countries tend to be composed of relatively smaller share of high-skills and service occupations than those with foreign R&D centres or business branch or with affiliates located in advanced countries.

On the incidence and effects of job displacement: Evidence from Sweden

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.

The Long-Term Consequences of the Tech Bubble on Skilled Workers' Earnings

Using matched employer-employee data from France, we uncover an ICT boom-cohort discount on the long-term earnings of the large cohort of skilled workers entering in the Information and Communication Technology (ICT) sector during the 1990s Tech Bubble. Despite starting with 5% higher wages, these workers experience lower wage growth and end up with 6% lower wages fifteen years out,relative to similar workers who started outside the ICT sector. Other moments of the wage distribution are inconsistent with selection effects. We provide suggestive evidence that these workers accumulate human capital early in their career that rapidly depreciates.

Job satisfaction in developing countries

PurposeThe purpose of this paper is to contribute to this literature on developing countries by investigating the determinants of job satisfaction in Vietnam where the economics literature on this issue is virtually non-existent. The authors also contribute to the literature on income comparison by extending beyond the within-firm co-worker income comparison.Design/methodology/approachThe authors estimate a generalized order logit model for job satisfaction as statistical tests suggest that the parallel-lines assumption, which is often invoked in previous studies using the standard logit model, does not hold.FindingsFor Vietnam, the authors find that absolute and relative incomes as well as human resource practices such as efficiency wage and training policy have an impact on workers’ satisfaction. Workers in the foreign direct investment (FDI) sectors behave a bit differently from their peers in the domestic sector.Originality/valueTaking advantage of a unique matched employer–employee data set collected in 2008 by the North-South Institute (Canada) and the Vietnam Academy of Social Sciences, the authors are able to investigate the impact of a number of important job characteristics on job satisfaction such as absolute and reference incomes, wage policy, training plan for workers, union membership and job position, and, at the same time, to disentangle the possible differences in job satisfaction of workers in domestic vs FDI firms.

Does education improve employee benefits in Vietnam? The first evidence from matched employer–employee data

Based on a uniquely matched firm-worker panel dataset for 2013 and 2015, this study is the first to consider the effect of education on employee benefits in terms of wages and quality of employment...

Wage Differentials by Bargaining Regime in Spain (2002-2014): An Analysis Using Matched Employer-Employee Data

This research examines wage differentials associated to different collective bargaining regimes in Spain and their evolution over time based on matched employer-employee microdata. The primary objective is to analyse the wage differentials associated to the presence of a firm-level agreement and how they have evolved, taking into account the changes in the economic cycle and the recent labour reform of 2012. The second objective of the study is to examine the impact on wages of an absence of a collective agreement. This regime has become more prevalent due to the regulatory changes associated to the labour reform. From the evidence obtained it may be concluded that, although the higher wages observed in company-level agreements are systematically explained by the better characteristics of firms with labour agreements, there is a positive wage premium that favours workers mostly in the middle and upper-middle end of the wage distribution. This premium has remained relatively stable over time and does not seem to have been affected by the reform, although a degree of cyclical evolution cannot be ruled out. With respect to the impact on wages of the absence of a collective agreement, the results suggest that this level of bargaining, which is still fairly scarce, despite displaying an increasing trend, is associated, on average, to comparatively low wages, and, consequently, to higher wage flexibility. The principal explanatory cause for this wage differential is the existence of a negative wage premium for workers of firms covered by sectoral agreements, particularly those at the lower end of the distribution.

Are Women Doing it for Themselves? Gender Segregation and the Gender Wage Gap

Using matched employer-employee data from the 2004 and 2011 Workplace Employment Relations Surveys (WERS) for Britain we find a raw gender wage gap (GWG) in hourly wages of around 0.18-0.21 log points. The regression-adjusted gap is around half that. However, the GWG declines substantially with the increasing share of female managers in the workplace. The gap closes because women’s wages rise with the share female managers in the workplace while men’s wages fall. Panel and instrumental variables estimates suggest the share of female managers in the workplace has a causal impact in reducing the GWG. The role of female managers in closing the GWG is more pronounced when employees are paid for performance, consistent with the proposition that women are more likely to be paid equitably when managers have discretion in the way they reward performance and those managers are women. These findings suggest a stronger presence of women in managerial positions can help tackle the GWG.

A Distributional Framework for Matched Employer Employee Data

We propose a framework to identify and estimate earnings distributions and worker composition on matched panel data, allowing for two‐sided worker‐firm unobserved heterogeneity and complementarities in earnings. We introduce two models: a static model that allows for nonlinear interactions between workers and firms, and a dynamic model that allows, in addition, for Markovian earnings dynamics and endogenous mobility. We show that this framework nests a number of structural models of wages and worker mobility. We establish identification in short panels, and develop tractable two‐step estimators where firms are classified in a first step. Applying our method to Swedish administrative data, we find that log‐earnings are approximately additive in worker and firm heterogeneity. Our estimates imply the presence of strong sorting patterns between workers and firms, and a small contribution of firms—net of worker composition—to earnings dispersion. In addition, we document that wages have a direct effect on mobility, and that, beyond their dependence on the current firm, earnings after a job move also depend on the previous employer.

Labor-Market Adjustment Under Extreme Heat Shocks: Evidence From Brazil

Despite rich evidence on the contemporaneous labor-productivity impact of heat shocks, little is known about what happens to employment over time. This paper provides worker-level evidence on labor-market adjustment margins to extreme heat. Exploiting employer-employee matched data from Brazil, I find that quarterly heat shocks lead to increases in the propensity of manufacturing-worker layoff. I further combine agricultural census and crop calendars to identify the transmission mechanism. Second, consistent with the direct labor productivity channel, the impact is stronger for workers in routine-manual task intensive occupations. Third, tracking individuals across job spells, I provide evidence on heat-related worker reallocation failures.

Upstreamness, Wages and Gender: Equal Benefits for All?

This paper provides first evidence on the impact of a direct measure of firm-level upstreamness (i.e. the steps before the production of a firm meets final demand) on workers' wages. It also investigates whether results vary along the earnings distribution and by gender. Findings, based on unique matched employer-employee data relative to the Belgian manufacturing industry for the period 2002-2010, show that workers earn significantly higher wages when employed in more upstream firms. Yet, the gains from upstreamness are found to be very unequally shared among workers. Unconditional quantile estimates suggest that male top-earners are the main beneficiaries, whereas women, irrespective of their earnings, appear to be unfairly rewarded. Quantile decompositions further show that these differences in wage premia account for a substantial part of the gender wage gap, especially at the top of the earnings' distribution.

Language Premium Myth or Fact: Evidence from Migrant Workers of Guangdong, China

Using unique matched employer-employee data from China, we discover that migrant workers in the manufacturing industry who are proficient in the local dialect earn lower wages than those who are not. We also find that workers with better dialect skills are more likely to settle for lower wages in exchange for social insurance. We hypothesize that they are doing so in the hope of obtaining permanent residency and household registration status (hukou) in the host city where they work. Further tests show that the phenomenon of exchanging wages for social insurance participation is more pronounced among workers employed in smaller enterprises. Moreover, migrant workers with better language skills have a stronger desire to stay in the host city. Our conclusions are robust to different specifications, even after addressing the endogeneity issue for language acquisition. The present study provides a new perspective on the impact of language fluency on social integration among migrants, one of the most disadvantaged groups in developing countries.