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Firms and Skills: The Evolution of Worker Sorting

Author

Listed:
  • Håkanson, Christina

    (Sveriges Riksbank)

  • Lindqvist, Erik

    (Stockholm School of Economics)

  • Vlachos, Jonas

    (Department of Economics,)

Abstract
We document a significant increase in the sorting of workers by cognitive and non-cognitive skills across Swedish firms between 1986 and 2008. The weight of the evidence suggests that the increase in sorting is due to stronger complementarities between worker skills and technology. In particular, a large fraction of the increase can be explained by the expansion of the ICT sector and a reallocation of engineers across firms. We also find evidence of increasing assortative matching, in the sense that workers who are particularly skilled in their respective educational groups are more likely to work in the same firms. Changes in sorting patterns and skill gradients can account for a about half of the increase in between-firm wage dispersion.

Suggested Citation

  • Håkanson, Christina & Lindqvist, Erik & Vlachos, Jonas, 2015. "Firms and Skills: The Evolution of Worker Sorting," Working Paper Series 1072, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:1072
    as

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    More about this item

    Keywords

    Skill sorting; Skilled-biased technological change; Outsourcing; Globalization; Cognitive skills; Non-cognitive skills; Personality; Employer-employee matched data;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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