Wage Sorting Trends

Jesper Bagger, Rune Vejlin and Kenneth Sørensen

Economics Working Papers from Department of Economics and Business Economics, Aarhus University

Abstract: Using a population-wide Danish Matched Employer-Employee panel from 1980-2006, we document a strong trend towards more positive assortative wage sorting. The correlation between worker and firm fixed effects estimated from a log wage regression increases from -0.07 in 1981 to .14 in 2001. The nonstationary wage sorting pattern is not due to compositional changes in the labor market, primarily occurs among high wage workers, and comprises 41 percent of the increase in the standard deviation of log real wages between 1980 and 2006. We show that the wage sorting trend is associated with worker reallocation via voluntary quits.

Keywords: Matched Employer-Employee Data; Firmfixed effects; Worker fixed effects; Wage sorting; Wage inequality; Voluntary quits. (search for similar items in EconPapers)
JEL-codes: J30 J31 J62 (search for similar items in EconPapers)
Pages: 15
Date: 2012-08-09
New Economics Papers: this item is included in nep-hrm, nep-lab and nep-lma
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Citations: View citations in EconPapers (9)

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Journal Article: Wage sorting trends (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:aah:aarhec:2012-17

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