Documents Maliranta, Mika 8 results

"The bulk of innovation subsidies in Finland are allocated to firms in industries where the employment share of “innovators,” i.e., workers who are specialized in R&D&I, is very high. The average subsidy per employee is typically the highest among young firms. At the firm level, an increase in innovation subsidies is typically associated with an inflow of innovators from high-productivity firms. These findings suggest that innovation subsidies contribute to economic renewal and the diffusion of knowledge between firms. Non-innovation subsidies, in contrast, appear to support established industry structures: a large share of them has been granted to relatively old firms within “traditional” manufacturing industries. Since non-innovation subsidies are systematically allocated to different types of firms than innovation subsidies, they may also crowd out resources from firms that receive innovation subsidies, thereby overriding some of the possible beneficial effects of innovation subsidies."

"This paper analyzes occupational polarization within and across firms using comprehensive matched employer-employee panel data from Finland. The occupational distribution in Finland has been polarizing over the last few decades, with mid-level production and clerical jobs eroding while low-skill service occupations and high-skill specialist occupations gain share. We find that the phenomenon is taking place within existing firms, as well as due to firm entry and exit. Service jobs are increasing through the entry-exit dynamics, but also via establishment level restructuring among continuing firms. Routine jobs, including mid-level plant operating jobs, are being destroyed both among continuing firms and at the entry-exit margin. The share of high-level occupations increases largely within continuing firms. Within the continuing firms the job polarization appears to be related to the trade of goods and services, as well as the outsourcing of tasks. Firms with high R&D expenditures and ICT use are more prone to lay off process and production workers."

"The contribution of different-sized businesses to job creation continues to attract policymakers' attention, however, it has recently been recognized that conclusions about size were confounded with the effect of age. We probe the role of size, controlling for age, by comparing the cohorts of firms born in 1998 over their first decade of life, using variation across half a dozen northern European countries Austria, Finland, Germany, Norway, Sweden, and the UK to pin down size effects. We find that a very small proportion of the smallest firms play a crucial role in accounting for cross-country differences in job growth. A closer analysis reveals that the initial size distribution and survival rates do not seem to explain job growth differences between countries, rather it is a small number of rapidly growing firms that are driving this result."

"This paper examines the relationship between outsourcing and various aspects of employee well-being by devoting special attention to the role of occupational restructuring as a conveying mechanism. Using linked employer-employee data, we find that offshoring involves job destruction, especially when the destination is a low-wage country. In such circumstances, staying employees' job satisfaction is reduced. However, the relationship between outsourcing and employee well-being is not entirely negative. Our evidence also shows that offshoring to high-wage countries stimulates the vertical mobility of employees in affected firms in a manner that improves perceived well-being, particularly in terms of better prospects for promotion."

"This study explores the structure and the dynamics of regional job and worker flows. The measures of job and worker flows are related to economic fluctuations, demographic factors and industry structure by employing the data of 85 Finnish regions over the period 1988–97. It is shown that labour market dynamics differ markedly between regions. As in previous analyses of linked employer–employee data, job and worker flows are shown to behave cyclically. In addition, the results indicate that observable differences in regional productivity, in-migration, demographics and industry structure help to explain the prevailing disparities in regional labour markets."

"The bad labour market performance of the workforce over 50 indicates that an aged workforce is often a burden for firms. Our paper seeks to investigate whether and why this is the case by providing evidence on the relation between age, seniority and experience, on the one hand, and the main components of labour costs, namely productivity and wages, on the other, for a sample of plants in three manufacturing industries ('forest', 'industrial machinery' and 'electronics') in Finland during the IT revolution in the 1990s. In 'average' industries - those not undergoing major technological shocks - productivity and wages keep rising almost indefinitely with the accumulation of either seniority (in the forest industry) or experience (in the industry producing industrial machinery). In these industries, the skill depreciation often associated with higher seniority beyond a certain threshold does not seemingly raise labour costs. In electronics, instead, the seniority-productivity profile shows a positive relation first and then becomes negative as one looks at plants with higher average seniority. This body of evidence is consistent with the idea that fast technical change brings about accelerated skill depreciation of senior workers. We cannot rule out, however, that our correlations are also simultaneously produced by worker movements across plants. The seniority-earnings profile in electronics is instead rather similar to that observed for the other industries - a likely symptom of the prevailing Finnish wage bargaining institutions which tend to make seniority one essential element of wage determination. In the end, seniority matters for labour costs, not age as such. But only in high-tech industries, not in the economy at large. This is well tuned with previous research on gross flows of workers and jobs in the US and other OECD countries which unveiled the productivity-driving role of resource reallocation (or lack thereof) between plants. To improve the employability of the elderly at times of fast technical change, public policy should thus divert resources away from preserving existing jobs and lend more attention to the retraining of old workers to ease their reallocation away from less productive plants (or plants where they have become less productive) into new jobs."

"This study analyzes the relationships among wages, firm size, and profit sharing schemes. We develop a simple theoretical model and explore the relationship empirically using high-quality panel data. The theoretical model shows that the firm-size wage premium decreases in the presence of profit sharing. The empirical results based on rich matched employee-employer data for private sector wage earners in Finland show that the firm-size wage premium is modest, and it becomes negligible when we account for profit sharing and covariates describing assortative matching and monopsony behavior. The analysis suggests that profit sharing schemes embody effects of firm-specific unobservables that raise productivity, support rent sharing, and boost wages."

"This paper addresses three simple questions: how should the contribution of high-growth firms to job creation be measured? how much does this contribution vary across countries? to what extent does the cross-country variation depend on variation in the proportion of high-growth firms in the business population? The first is a methodological question which we answer using a more highly articulated version of the standard job creation and destruction accounts. The other two are empirical questions which we answer using a purpose-built data set assembled from national firm-level sources and covering nine countries, spanning the ten three year periods from 2000-2003 to 2009-2012. The basic principle governing the development of the accounting framework is the choice of appropriate comparators. Firstly, when measuring contributions to job creation, we should focus on just job creating firms, otherwise we are summing over contributions from firms with positive, zero, and negative job creation numbers. Secondly, because we know growth depends in part on size, the "natural" comparison for high-growth firms is with job creation by similar-sized firms which simply did not grow as fast as high-growth firms. However, we also show how the measurement framework can be further extended to include, for example, a consistent measure of the contribution of small job creating firms. On the empirical side, we find that the high-growth firm share of job creation by large job creating firms varies across countries by a factor of 2, from around one third to two thirds. A relatively small proportion of this cross-country variation is accounted for by variations in the influence of high-growth firms on job creation. On average high-growth firms generated between three or four times as many jobs as large non-high-growth job creating firms, but this ratio is relatively similar across countries. The bulk of the cross-country variation in high-growth firm contribution to job creation is accounted for by the relative abundance (or rarity) of high-growth firms. Moreover, we also show that the measurement of abundance depends upon the choice of measurement framework: the "winner" of a cross-national high-growth firm "beauty contest" on one measure will not necessarily be the winner on another."