On the mobility of salaried employees in Finnish industry: wage bracket and workplace changes 1980–1992
Introduction
This study examines the labour market mobility of salaried employees in Finnish industry during the period 1980–1992. Reija Lilja (Lilja 1995, 1996) has recently conducted a notable analysis of this relatively new topic. In the present study, the analysis is extended to cover not only transitions between wage brackets, as examined by Lilja, but also changes of workplace establishments. Salaried employees may advance in their careers not only within their current firm but also by moving between establishments. Such transitions may occur simultaneously with changes in wage brackets, but they may also precede or substitute for them.
The focus is on explaining mobility rather than providing a detailed descriptive account of it. The explanatory variables include observable characteristics of employees—such as gender, age, education, and tenure—as well as their previous workplace and wage bracket transitions. If workplace changes and movements within the wage hierarchy are strongly interconnected, this relationship constitutes an essential aspect of labour market dynamics. As will be shown, the analysed data provide some support for this view.
Two hypotheses underpin the analysis. Labour market mobility may be explained by the match between the employee and the job (or rather by mismatches). Alternatively, mobility may largely reflect unobserved individual characteristics, such as ambition or ability. In this case, mobility is interpreted as an indicator of employee capability. The objective of the study is to assess whether these hypotheses are consistent with the empirical evidence.
The structure of the study is as follows. Chapter 2 reviews the economic literature on salaried employees’ labour markets and previous empirical research conducted in Finland. Chapter 3 briefly describes the empirical dataset used, and Chapter 4 outlines the phenomena under study. The estimation results of the equations explaining wage bracket and workplace transitions are presented in Chapter 5, and the results of the earnings equations in Chapter 6. A summary of the study is provided in Chapter 7. Appendix A presents the generalized estimating equation (GEE) method used to explain wage bracket and workplace transitions, and Appendix B presents results estimated using an alternative method. (AI translation)
- ISSN: 1236-7176
- ISBN: 951-9282-94-7
