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Working paper No. 291: The Impact of Employing Mismatched Workers on Firm Productivity, Wages and Profits

PublikationWorking paper
Arbetsmarknad, Matchning, Produktivitet, Utbildning
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Sammanfattning

Educational mismatch in the form of over- and under-educated workers has long been studied in relation to labor market outcomes for individual workers. While its consequences for individual workers and society are dire, we have only anecdotal evidence of its consequences for firms’ competitiveness. To bridge this gap, this paper studies the impact of mismatch on firm productivity, wages and profit. The results suggest an asymmetric effect from employing over- and under-educated workers. We find that while employing over-educated workers add to wage cost, there are no matching productivity gains, By contrast, the performance of under-educated workers more than compensates for their wage costs, leading to increased profits at the firm level. The net effect, therefore, in the form of gross operating surplus is significantly negative (positive) when firms employ over- (under-)educated workers. The results suggest that the positive effects primarily stem from under-educated young workers, whereas the losses can be traced to over-educated older workers.

Tingvall, P. & Halvarsson, D. (2017). The Impact of Employing Mismatched Workers on Firm Productivity, Wages and Profits. Ratio Working Paper No. 291. Stockholm: Ratio.

Baserat på innehåll

Working paper No. 291: The Impact of Employing Mismatched Workers on Firm Productivity, Wages and Profits
Working paperPublikation
Tingvall, P. & Halvarsson, D.
Publiceringsår

2017

Publicerat i

Ratio Working Paper

Sammanfattning

Educational mismatch in the form of over- and under-educated workers has long been studied in relation to labor market outcomes for individual workers. While its consequences for individual workers and society are dire, we have only anecdotal evidence of its consequences for firms’ competitiveness. To bridge this gap, this paper studies the impact of mismatch on firm productivity, wages and profit. The results suggest an asymmetric effect from employing over- and under-educated workers. We find that while employing over-educated workers add to wage cost, there are no matching productivity gains, By contrast, the performance of under-educated workers more than compensates for their wage costs, leading to increased profits at the firm level. The net effect, therefore, in the form of gross operating surplus is significantly negative (positive) when firms employ over- (under-)educated workers. The results suggest that the positive effects primarily stem from under-educated young workers, whereas the losses can be traced to over-educated older workers.

Working paper No. 291: The Impact of Employing Mismatched Workers on Firm Productivity, Wages and Profits
Working paperPublikation
Tingvall, P. & Halvarsson, D.
Publiceringsår

2017

Publicerat i

Ratio Working Paper

Sammanfattning

Educational mismatch in the form of over- and under-educated workers has long been studied in relation to labor market outcomes for individual workers. While its consequences for individual workers and society are dire, we have only anecdotal evidence of its consequences for firms’ competitiveness. To bridge this gap, this paper studies the impact of mismatch on firm productivity, wages and profit. The results suggest an asymmetric effect from employing over- and under-educated workers. We find that while employing over-educated workers add to wage cost, there are no matching productivity gains, By contrast, the performance of under-educated workers more than compensates for their wage costs, leading to increased profits at the firm level. The net effect, therefore, in the form of gross operating surplus is significantly negative (positive) when firms employ over- (under-)educated workers. The results suggest that the positive effects primarily stem from under-educated young workers, whereas the losses can be traced to over-educated older workers.

Ratio Working Paper No. 349: Industrial conflict in essential services in a new era – Swedish rules in a comparative perspective
Working paperPublikation
Karlson, N.
Publiceringsår

2021

Publicerat i

Ratio Working Paper

Sammanfattning

This paper examines whether the Swedish regulatory system of dealing with industrial conflicts that affect essential services need an update or reform. Are the existing rules effective in a world where many essential services are upheld by many interdependent agents in complex systems where every single node becomes critical for the functioning of the system, and where the essential service activities could be either private or public? A comparative study is conducted with the corresponding regulatory systems of the United Kingdom, Germany, and Denmark.
The conclusion is that Sweden is a special case. The Swedish protection against and readiness in dealing with societally harmful industrial conflicts in essential services is weaker than in the countries of comparison. Just as in relation to other threats to essential services, it is not sustainable to claim that just because such a threat is not currently present, there would be no need for preparedness.
There are many alternative ways to handle this. Desirable methods should both prevent harmful conflicts from erupting and end conflicts that have grown harmful to society at a later stage. The labour market organisations should have a mutual interest in reforming the rules.

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