Worker Flows, Job Flows and Firm Wage Policies: An Analysis of Slovenia

51 Pages Posted: 1 Oct 2002

See all articles by Milan Vodopivec

Milan Vodopivec

World Bank - Human Development Network; IZA Institute of Labor Economics

John Haltiwanger

University of Maryland - Department of Economics; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)

Multiple version iconThere are 2 versions of this paper

Date Written: September 2002

Abstract

Like many transition economies, Slovenia is undergoing profound changes in the workings of the labor market with potentially greater flexibility in terms of both wage and employment adjustment. We investigate the impact of the changing labor market for Slovenia using unique longitudinal matched employer-employee data that permits measurement of employment transitions and wages for workers and links of the workers to the firms with whom they are employed. We can thus measure worker flows and job flows in a comprehensive and integrated manner. We find a high pace of job flows in Slovenia especially for young, small, private and foreign owned firms and for young, less educated workers. While job flows have approached the rates observed in developed market economies, the excess of worker flows above job flows is lower than that observed in market economies. A key factor in the patterns of the worker and job flows is the determination of wages in Slovenia. A base wage schedule provides strict guidelines for minimum wages for different skill categories. However, firms are permitted to offer higher wages to an individual based upon the success of the worker and/or the firm. Our analysis shows that firms deviate from the base wage schedule significantly and that the idiosyncratic wage policies of firms are closely related to the observed pattern of worker and job flows at the firm. Firms with more flexible wages (measured as less compression of wages within the firm) have less employment instability and also are able to improve the match quality of its workers.

Keywords: Job Flows, Worker Flows, Wage Policies

JEL Classification: J23, J31, J41, J61, P23, P31

Suggested Citation

Vodopivec, Milan and Haltiwanger, John C., Worker Flows, Job Flows and Firm Wage Policies: An Analysis of Slovenia (September 2002). IZA Discussion Paper No. 569; William Davidson Institute Working Paper No. 486. Available at SSRN: https://ssrn.com/abstract=331461

Milan Vodopivec

World Bank - Human Development Network ( email )

1818 H Street, NW
Washington, DC 20433
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

John C. Haltiwanger (Contact Author)

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-3504 (Phone)
301-405-3542 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
82
rank
271,418
Abstract Views
1,194
PlumX Metrics
!

Under construction: SSRN citations will be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information