What drives wage growth across sectors?
The article examines wage development across different sectors and the contribution of various factors to wage growth using the method developed by Kauhanen and Maliranta (2019). In the analysis, wage growth is broken down into the wage growth of employees who remain in the same workplace and the same job, and the effects of changes in workplace structure and employee composition. These so-called decompositions reveal the components of wage growth in each sector and provide indications of possible creative destruction in the sector as well as the effects of cyclical fluctuations on the components of wages.
The calculations use wage data compiled by the Confederation of Finnish Industries (EK) for the years 2013–2022. The data constitute a panel linking employees and employers, making it possible to track the movements of employees between companies or positions as well as movements of companies and job roles. The data are based on a survey conducted by EK among its members, which is mandatory for all but the smallest member companies. The dataset contains approximately 600,000 observations per year. Due to the method of compilation, EK’s data cover only part of Statistics Finland’s corresponding wage structure statistics, meaning that wage growth calculated from EK’s wage data differs to some extent from Statistics Finland’s earnings index for the enterprise sector. (AI translation)
