Essays in Empirical Labor Economics

Abstract: This thesis consists of four self-contained essays in the field of empirical labor economics.The first essay, Nominal Wage Rigidity in the Swedish Labor Market, presents an empirical investigation of the extent of downward nominal wage rigidity on the Swedish labor market. The analysis shows that cuts in nominal basic wages are rare and the skewness of wage change distributions is negatively correlated with the median change, corroborating the existence of downward rigidity. The second essay, Nominal Wage Rigidity and Real Implications for the Swedish Labor Market, is based on a model of proportional downward wage rigidity. Real implications of the estimates are examined, in order to analyze the effects of downward nominal wage rigidity on the NAIRU under different inflation policies. The potential cost of downward rigidity on the long-run unemployment rate is found to be relatively moderate.The third essay, Firm Size -Wage Effect: Fact or Artifact?, investigates the employer size-wage premium. The inclusion of controls for specific occupations and hierarchies has a profound effect on the estimated effect. The control for hierarchies conditional on occupation results in an effect of size on wage that is not necessarily positive.The fourth essay, Sharing Responsibility? Short- and Long-term Effects of Sweden's "Daddy-Month" Reform. In 1995, the Swedish government reformed the parental leave system. The reform constitutes a natural experiment. Comparing two cohorts of newborns, their mothers and fathers over a period of eight years, we look at the number of days mothers and fathers take for parental leave and the number of days for care of sick children. We find that the reform had a strong short-term effect on parental leave by fathers, but that there are no long-run effects on fathers' willingness to increase their part in care for sick children.