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Title:Worker Flows, Job Flows and Firm Wage Policies: An Analysis of Slovenia PDF Logo
Authors:Haltiwanger, John
Vodopivec, Milan
Issue Date:2002
Series/Report no.:IZA Discussion paper series 569
Abstract:Like many transition economies, Slovenia is undergoing profound changes in the workings of the labor market with potentially greater flexibility in terms of both wage and employment adjustment. We investigate the impact of the changing labor market for Slovenia using unique longitudinal matched employer-employee data that permits measurement of employment transitions and wages for workers and links of the workers to the firms with whom they are employed. We can thus measure worker flows and job flows in a comprehensive and integrated manner. We find a high pace of job flows in Slovenia especially for young, small, private and foreign owned firms and for young, less educated workers. While job flows have approached the rates observed in developed market economies, the excess of worker flows above job flows is lower than that observed in market economies. A key factor in the patterns of the worker and job flows is the determination of wages in Slovenia. A base wage schedule provides strict guidelines for minimum wages for different skill categories. However, firms are permitted to offer higher wages to an individual based upon the success of the worker and/or the firm. Our analysis shows that firms deviate from the base wage schedule significantly and that the idiosyncratic wage policies of firms are closely related to the observed pattern of worker and job flows at the firm. Firms with more flexible wages (measured as less compression of wages within the firm) have less employment instability and also are able to improve the match quality of its workers.
Subjects:job flows
worker flows
wage policies
JEL:J41
J31
P31
J23
P23
J61
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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