Documents Vejlin, Rune M. 4 results

"I develop a stylized partial on-the-job equilibrium search model that incorporates a spatial dimension. Workers reside on a circle and can move at a cost. Each point on the circle has a wage distribution. Implications about wages and job mobility are drawn from the model and tested on Danish matched employer–employee data. The model predictions hold true. I find that workers working farther away from their residence earn higher wages. When a worker is making a job-to-job transition where he/she changes workplace location he/she experiences a higher wage change than a worker making a job-to-job transition without changing workplace location. However, workers making a job-to-job transition that makes the workplace location closer to the residence experience a wage drop. Furthermore, low-wage workers and workers with high transportation costs are more likely to make job-to-job transitions, but also residential moves."

"This paper estimates a wage growth equation containing human capital variables known from the traditional Mincerian wage equation with year, worker and firm fixed effects included as well. The paper thus contributes further to the large empirical literature on unobserved heterogeneity following the work of Abowd, Kramarz, and Margolis [1999; Econometrica 67(2): 251–333]. Our main contribution is to extend the analysis from wage levels to wage growth. The specification enables us to estimate the individual-specific and firm-specific fixed effects and their degree of explanation on wage growth. The analysis is conducted using Danish longitudinal matched employer–employee data from 1980 to 2006. We find that the worker fixed effect dominates both the firm fixed effect and the effect of the observed covariates. Worker effects are estimated to explain 7–12 per cent of the variance in wage growth whereas firm effects are estimated to explain 4–10 per cent. We furthermore find a negative correlation between the worker and firm effects, as do nearly all authors examining wage level equations."

"We document the declining gap between the average earnings of women and men in Denmark from 1980 to 2010. The decline in the earnings gap is driven by increased labor force participation and increases in hours worked by women, and to a smaller extent by a decline in the gender wage gap. The gap has declined least among higher earning women – the average wage of the top 10 percent of female earners is 28-33% lower than the average wage of the top 10 percent of male earners. Women are becoming more educated and are a larger share of the professional labor force than in previous decades, but a substantial wage gap of about 10 percent remains for the youngest cohorts even after controlling for age, education, experience, occupation, and firm choice. Unlike the case of the US, differences in educational attainment, occupational choice, industry, and experience explained about 15 percentage points of the Danish wage gap in 1980, but now these factors explain only about 6 percentage points of the Danish wage gap. In fact, though variation in the wage gap across occupations is substantial, this variation is not correlated with the fraction of the occupation which is female. The data show a great deal of sorting and segregation across industries, occupations, and even firms. However, this sorting does not explain more than half of the wage gap. We conclude that a great deal of the remaining disparity between the wages of women and men is tied to the differential effects of parenthood by gender."

"In this paper we estimate the causal effect of lowering the public income transfers administered to newly arrived refugee immigrants in Denmark – the so-called starthelp – using a competing risk mixed proportional hazard framework. The two competing risks are exit to job and exit out of the labour force. A standard search model predicts that lower benefits decrease the reservation wage and/or increase the search effort. However, newly arrived refugee immigrants may initially have a weak position in the labour market due to the fact that they do not know the language and typically have no education, or alternatively, their education is not recognized in Denmark. Hence, there may be no demand for their skills. The empirical question addressed here is whether lower benefits affect their job finding rate; if no employer wants to hire them at the going minimum wage, the fact that the reservation wage is lowered may have little effect. For identification we use a ‘quasi-natural' experiment, in which the rules for welfare benefits in Denmark changed rather dramatically. Refugee immigrants obtaining residence permit before July 1st 2002 received and continue to receive larger income transfers than those obtaining their residence permit after July 1st. We find that lowering public income transfers has a small positive effect on the job finding rate, once calendar time effects are introduced into the model. However, introducing time-variation in the effect, we find that most of the positive effect stems from a large positive effect after two years in Denmark. We also find that the exit rate from the labour force is positively affected by lower transfers, but here the effect is large during the first year in the host country, and then it declines. Furthermore, we investigate heterogeneous treatment effects, and we find, generally, that those which we consider the weakest in the labour market are close to being immune to this treatment."