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Vertical and Horizontal Wage Dispersion and Mobility Outcomes: Evidence from the Swedish Microdata
London Business Sch, England.
Linköping University, Department of Management and Engineering, The Institute for Analytical Sociology, IAS. Linköping University, Faculty of Arts and Sciences.
2018 (English)In: Organization science (Providence, R.I.), ISSN 1047-7039, E-ISSN 1526-5455, Vol. 29, no 1, p. 17-38Article in journal (Refereed) Published
Abstract [en]

Using employer-employee matched data from Sweden between 2001 and 2008, we test hypotheses designed to assess the contingent nature of the relationship between wage dispersion and cross-firm mobility. Whereas past research has mostly established that dispersed wages increase interfirm mobility, we investigate the conditions under which pay variance might have the opposite effect, serving to retain workers. We propose that the effect of wage dispersion is contingent on organizational rank and that it depends on whether wages are dispersed vertically (between job levels) or horizontally (within the same job level). We find that vertical wage dispersion suppresses cross-firm mobility because it is associated with outcomes beneficial for employees, such as attractive advancement opportunities. By contrast, horizontal wage dispersion increases cross-firm mobility because it is associated with outcomes harmful for employees, such as inequity concerns. We further find that the vertical-dispersion effect is amplified (mitigated) for bottom (top) different-levelwage earners because bottom (top) wage earners have the most (least) to gain from climbing the job ladder. Similarly, the horizontal-dispersion effect is amplified (mitigated) for bottom (top) same-levelwage earners because bottom (top) wage earners are most (least) subject to negative consequences of this dispersion. More broadly, this study contributes to our understanding of the relationship between wage dispersion and cross-firm mobility.

Place, publisher, year, edition, pages
INFORMS , 2018. Vol. 29, no 1, p. 17-38
Keywords [en]
wage dispersion; mobility; human capital
National Category
Business Administration
Identifiers
URN: urn:nbn:se:liu:diva-147464DOI: 10.1287/orsc.2017.1169ISI: 000427056200002OAI: oai:DiVA.org:liu-147464DiVA, id: diva2:1205975
Note

Funding Agencies|European Research Council under European Union [ERC] [324233]; Riksbankens Jubileumsfond [DNR M12-0301:1]; Swedish Research Council [DNR 445-2013-7681, DNR 340-2013-5460]

Available from: 2018-05-15 Created: 2018-05-15 Last updated: 2018-05-15

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Balachandran, Chanchal
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The Institute for Analytical Sociology, IASFaculty of Arts and Sciences
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CiteExportLink to record
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Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • oxford
  • Other style
More styles
Language
  • de-DE
  • en-GB
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  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf