Firm Pay Dynamics

Niklas Engbom, Christian Moser and Jan Sauermann

No 29697, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the nature of firm pay dynamics. To this end, we propose a statistical model that extends the seminal framework by Abowd, Kramarz and Margolis (1999) to allow for idiosyncratically time-varying firm pay policies. We estimate the model using linked employer-employee data for Sweden from 1985 to 2016. By drawing on detailed firm financials data, we show that firms that become more productive and accumulate capital raise pay, whereas firms lower pay as they add workers. A secular increase in firm-year pay dispersion in Sweden since 1985 is accounted for by greater persistence of firm pay among incumbent firms as well as greater dispersion in firm pay among entrant firms, as opposed to more volatile firm pay.

JEL-codes: D22 D31 E24 J31 M13 (search for similar items in EconPapers)
Date: 2022-01
New Economics Papers: this item is included in nep-cwa and nep-mac
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Published as Niklas Engbom & Christian Moser & Jan Sauermann, 2022. "Firm pay dynamics," Journal of Econometrics, .

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Related works:
Journal Article: Firm pay dynamics (2023)
Working Paper: Firm Pay Dynamics (2022)
Working Paper: Firm Pay Dynamics (2022)
Working Paper: Firm pay dynamics (2021)
Working Paper: Firm Pay Dynamics (2020)
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