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Seniority rules, worker mobility and wages: Evidence from multi-country linked employer-employee data

Petri Böckerman (), Per Skedinger () and Roope Uusitalo

Labour Economics, 2018, vol. 51, issue C, 48-62

Abstract: We construct multi-country employer-employee data to examine the consequences of last-in, first-out rules. We identify the effects by comparing worker exit rates between different units of the same firms operating in Sweden and Finland, two countries that have different seniority rules. We observe a relatively lower exit rate for more senior workers in Sweden in the shrinking firms and among the low-wage workers. These empirical patterns are consistent with last-in, first-out rules in Sweden providing protection from dismissals for the more senior workers among the worker groups to whom the rules are most relevant. Similarly, we observe a steeper seniority-wage profile in Sweden, suggesting that last-in, first-out rules may also be beneficial for more senior workers in terms of compensation.

Keywords: Multi-country linked employer-employee data; Employment protection legislation; Seniority rules; Last-in, first-out rules; Seniority-wage profile (search for similar items in EconPapers)
JEL-codes: K31 J63 J32 J08 L51 (search for similar items in EconPapers)
Date: 2018
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Related works:
Working Paper: Seniority Rules, Worker Mobility and Wages: Evidence from Multi-Country Linked Employer-Employee Data (2016) Downloads
Working Paper: Seniority Rules, Worker Mobility and Wages: Evidence from Multi-Country Linked Employer-Employee Data (2016) Downloads
Working Paper: Seniority rules, worker mobility and wages: Evidence from multi-country linked employer-employee data (2015) Downloads
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