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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.


Liknande innehåll

Working Paper No. 333: Balancing employment protection and what’s good for the company
Working paperPublikation
Stern, C. & Weidenstedt, L.
Publiceringsår

2020

Publicerat i

Ratio Working Paper

Sammanfattning

Like most developed countries, Sweden has institutionalized employment protection legislation, called LAS. LAS is interesting theoretically because parts of it are semi-coercive. The semi-coerciveness makes it possible for firms and unions under collective agreements to negotiate departures from the law, for instance regarding seniority rules and terminations due to employees’ fit and/or misconduct. In this sense, the law is more flexible than the legal text suggests. The present study explores how the semi-coercive institution of employment protection is perceived and implemented by managers of smaller manufacturing companies. The results suggest that managers support the idea of employment protection rules in principle but face a difficult balancing act in dealing with LAS. Thus, the institutional legitimacy of the law is low. LAS ends up producing local cultures of hypocrisy and pretense. The paper gives insights into how institutions aimed at producing good moral behavior sometimes end up producing the opposite.

Moderna tider 4.0
BokPublikation
Grafström, J.
Publiceringsår

2020

Sammanfattning

Vi är många som närmar oss ett vägval: antingen kan vi börja på en yrkesväg som leder till guld och gröna skogar, eller fortsätta trampa en allt smalare och allt mer eftersatt stig. Den här boken vänder sig till dig som är nyfiken på vad det är som förändras i Sverige och världen idag, vad vi kan lära oss av historiska omställningar och vilka branscher som kan påverkas, blomstra – eller dö.

Oavsett om det är teknologisk utveckling eller oförutsedda globala händelser som orsakar branschförändringar är en sak klar: förändringarna sker snabbt. Många kommer inte hinna med tåget. Det här är guiden till framtidens yrken för dig som inte vill bli kvar på perrongen.

Scandinavia: Refugees at work
BokkapitelPublikation
Joyce, P.
Publiceringsår

2019

Publicerat i
Sammanfattning

Germany was the top destination country by far for refugees arriving in the years between 2014 and 2017. But much-smaller Sweden received more asylum applications in relation to its population. The other two Scandinavian countries – Norway and Denmark – also saw significant numbers of asylum seekers in relation to their small populations. Since then, Scandinavian countries have turned to the sizable task of integrating new arrivals into the labour market. Refugees have struggled to find work in the Scandinavian countries. Figure 1 shows the employment rate (per cent) among adult refugees in Sweden, Denmark and Norway by years after arrival in the host country. As shown in Figure 1 only between 20 and 35 per cent of male refugees are working two years after arrival. The share in work increases with each year after arrival but employment generally plateaus after ten to fifteen years, significantly below the employment rate among the overall population. Female refugees need more time than males to find work. They usually have less schooling than their male counterparts and often bear children after arrival.48 Employment among female refugees picks up after some time though.

Refugees have long faced several barriers to finding work in Scandinavia, including lower average levels of education than the domestic workforce, lack of host-country language skills, a limited professional network and discrimination.49 These challenges, combined with the large number of arrivals in 2015–16, increased the willingness of Scandinavian governments to promote faster tracks to employment. In Denmark large reforms of integration policies were introduced in 2016. This led to substantial improvements in labour market outcomes.

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