Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
New Firms as Employers: The Wage Penalty for Voluntary and Involuntary Job Switchers
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Entrepreneurship and innovation. The Ratio Institute, Sweden. (Economics)ORCID iD: 0000-0002-1692-8677
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Entrepreneurship and innovation.ORCID iD: 0000-0003-1173-0853
2015 (English)In: Labour, ISSN 1121-7081, E-ISSN 1467-9914, Vol. 29, no 4, 348-366 p.Article in journal (Refereed) Published
Abstract [en]

According to previous research, new firms pay lower wages. However, previous studies have been unable to control for the possibility that the opportunity costs of accepting employment at new firms may differ across individuals. In this paper, we investigate whether a wage penalty for being employed at a new firm exists if we take the individual employee's experience and status in the labour market into consideration. We focus on individuals who decide to switch jobs and use matched employee-employer data about all firms and employees in Sweden for the period 1998-2010. Our results show that the share of job transitions into lower wages are higher for those who switch to new firms compared with incumbent firms (40 per cent and 31 per cent, respectively). Our endogenous wage equation estimates indicate that being an involuntary job switcher has an equally negative effect on wages at both new and incumbent firms. However, the positive effect of education on wages is more pronounced for job switchers selecting into incumbent firms.

Place, publisher, year, edition, pages
Wiley-Blackwell, 2015. Vol. 29, no 4, 348-366 p.
Keyword [en]
PRIVATE-SECTOR WAGES, GENDER-DIFFERENCES, REGRESSION-MODEL, LABOR MOBILITY, RISK-AVERSION, CAREER CHANGE, DIFFERENTIALS, SEARCH; SIZE, DETERMINANTS
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:kth:diva-177159DOI: 10.1111/labr.12055ISI: 000366905800002Scopus ID: 2-s2.0-84946485712OAI: oai:DiVA.org:kth-177159DiVA: diva2:871647
Note

QC 20151117. QC 20160121

Available from: 2015-11-16 Created: 2015-11-16 Last updated: 2017-12-01Bibliographically approved
In thesis
1. Employment in New Firms: Mobility and Labour Market Outcomes
Open this publication in new window or tab >>Employment in New Firms: Mobility and Labour Market Outcomes
2016 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis studies the role of new firms in the labour market and uses Swedish data to analyze labour mobility in new firms, including both transitions of workers into and from new firms. In particular, it focuses on employees’ wages in new firms and post-new firm employment labour market outcomes as transitions into long-term employment and entrepreneurship. 

This thesis consists of four essays. The first two essays concern labour mobility into new firms. The last two essays focus on post-new firm employment mobility.

The first essay explores the role of new firms as an entry point into the labour market for individuals with little (or no) labour market experience. The findings show that the wage penalty found in previous research, which includes more heterogeneous groups of employees, decreases once the focus is solely on labour market entrants. 

The second essay investigates whether there is a wage penalty for being employed at a new firm if the individual employee’s experience and status in the labour market are taken into account; this essay focuses on individuals who decide to switch jobs. The findings show that there is a wage penalty for being employed at a new firm; however, considering a random selection into new firms may underestimate the wage differentials.

The third essay studies the role that new firms play for the career path of their employees. In particular, this paper analyzes whether short-term employment in new firms (employment lasting less than one year) may serve as a stepping stone toward long-term employment (at least two years of employment with the same employer) for non-employed individuals. The findings indicate that short-term employment in new firms may serve as a stepping stone toward long-term employment.

The fourth paper examines the new firm effect on entrepreneurship, which the findings indicate is positive and statistically significant; this effect remains even after controlling for a worker's ability and shows that employees with both high and low levels of ability may transition to entrepreneurship.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2016. 55 p.
Series
TRITA-IEO, ISSN 1100-7982 ; 2016:10
Keyword
New firms, labour market entrants, wage penalty, job switchers, employment, long-term employment, stepping stone hypothesis, entrepreneurship, self-employment
National Category
Economics and Business Economics
Research subject
Economics
Identifiers
urn:nbn:se:kth:diva-192510 (URN)978-91-7729-099-5 (ISBN)
Public defence
2016-10-05, F3, Lindstedtsvägen 26, Stockholm, 10:00 (English)
Opponent
Supervisors
Note

QC 20160916

Available from: 2016-09-16 Created: 2016-09-13 Last updated: 2016-09-16Bibliographically approved

Open Access in DiVA

No full text

Other links

Publisher's full textScopushttp://onlinelibrary.wiley.com/doi/10.1111/labr.12055/pdf

Authority records BETA

Nyström, KristinaZhetibaeva Elvung, Gulzat

Search in DiVA

By author/editor
Nyström, KristinaZhetibaeva Elvung, Gulzat
By organisation
Entrepreneurship and innovation
In the same journal
Labour
Economics

Search outside of DiVA

GoogleGoogle Scholar

doi
urn-nbn

Altmetric score

doi
urn-nbn
Total: 111 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf