Wage and Labor Mobility in Denmark, 1980-2000

35 Pages Posted: 27 Jun 2007 Last revised: 13 Sep 2010

See all articles by Tor Eriksson

Tor Eriksson

Aarhus University - Department of Economics

Niels Westergaard-Nielsen

Copenhagen Business School; IZA Institute of Labor Economics

Date Written: April 2007

Abstract

This paper consists of three parts. First, we briefly describe some key features of the labor market in Denmark, some of which contribute to the Danish labor markets behaving quite differently from those in many other European countries. The next two parts exploit detailed linked employer-employee data. In the second part we document in some detail an important aspect of the functioning and flexibility of the labor markets in Denmark: the high level of worker mobility. We show that mobility is about as high, or even higher, as in the highly fluid U.S. labor market. Finally, we describe and examine the wage structure between and within firms and changes therein since 1980, especially with an eye on possible impacts of the trend towards a more decentralized wage determination. The shift towards decentralized wage bargaining has coincided with deregulation and increased product market competition. The evidence is, however, not consistent with stronger competition in product markets eroding firm-specific rents. Hence, the prime suspect is the change in wage setting institutions.

Suggested Citation

Eriksson, Tor and Westergaard-Nielsen, Niels, Wage and Labor Mobility in Denmark, 1980-2000 (April 2007). NBER Working Paper No. w13064, Available at SSRN: https://ssrn.com/abstract=986914

Tor Eriksson (Contact Author)

Aarhus University - Department of Economics ( email )

Fuglesangs Allé 4
Aarhus, 8210
Denmark
45 87164978 (Phone)

Niels Westergaard-Nielsen

Copenhagen Business School ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

IZA Institute of Labor Economics

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

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