The effects of markets, managers and peers on worker outcomes

University dissertation from Uppsala : Department of Economics, Uppsala University

Abstract: Essay 1: This essay exploits the entry of private independent high schools in Sweden to examine how local school competition affects the wages and the mobility of teachers in a market with individual wage bargaining. Using rich matched employer-employee panel data covering all high school teachers over a period of 16 years, I show that the entry of private schools is associated with higher teacher salaries, including higher salaries for teachers in public schools. The wage returns from competition are highest for teachers entering the profession and for teachers trained in math and science. Private school entry has also increased wage dispersion between high- and low-skilled teachers within the same field. Several robustness checks support a causal interpretation of the results, which draw attention to the potential effects of school competition on teacher supply, through the more differentiated wage setting of teachers.Essay 2: (with Olof Åslund and Oskar Nordström Skans) We investigate how manager origin affects hiring patterns, job separations, and entry wages. The analysis, draws on a longitudinal matched employer-employee data including more than 100,000 workplaces during a nine year period. Immigrant managers are substantially more likely to hire immigrants, a result robust to comparisons within 5-digit industry and location as well as within firms across establishments. The finding holds also when we follow establishments that change management over time, even accounting for trends. Origin dissimilarity increases separations within the first year of employment, but there is no impact on entry wages. Several results point to information asymmetries as an important explanation to the patterns.Essay 3: The third essay examines whether women benefit from working under female management. I use matched employer-employee panel data for Sweden, which enables me to account for unobserved heterogeneity among both workers and firms. In line with existing work, I document a substantial negative correlation between the proportion of female managers and the establishment’s gender wage gap. However, most of this relationship reflects worker heterogeneity, suggesting that sorting is an important explanation for the lower gender wage difference in female-led firms. Further analysis supports this conclusion by showing that while female managers are not more likely to hire same-sex workers per se, they do indeed hire women with higher portable earnings capacity.Essay 4: (with Peter Nilsson) We analyze how peer effects among co‑workers affect fertility using population‑wide matched employer-employee panel data. We provide evidence on if, when, why and for whom co‑workers’ fertility decisions matter. Overall the impact of co-workers on own fertility is of the same magnitude as the effect of being one year older in the age span 20 to 30. “Same-type” co‑workers are particularly influential, although social status and own previous childbearing experiences modify the influence of peers in distinct ways. Peers’ fertility decisions matter most when the uncertainty about job-related costs of childbearing is low. The results provide insights to the sharp fluctuations in fertility rates observed in many countries, and give an indication of how social interactions affect important career related decisions. 

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