Labor market size and multidimensional skill-mismatch
Abstract: Individuals working in larger labor markets tend to earn more than those working in smaller labor markets, but the reason for this is still unclear. This paper studies whether larger cities provide better occupational skill matches by combining machine learning techniques with data on individuals’ productive skills matched with employer data to construct a novel measure of match quality. I show that occupational skill-match quality is higher for individuals living in large local labor markets. The results hold conditional on skills, individual fixed effects, and when comparing individuals who move to labor markets of different sizes. Conditional on skills, differences in match quality explain around 30 percent of the wage gap between large and small labor markets and around 50 percent of the wage gap between medium and small labor markets. The higher match quality in larger labor markets is related to a more diversified occupation structure and more learning possibilities in these markets.
Labor-market Drivers of Intergenerational Earnings Persistence
(with Martin Nybom and Jan Stuhler)
Abstract: Does the sorting of workers across firms contribute to intergenerational persistence? We show that disparities in firm pay premia account for one-quarter of the intergenerational elasticity of income in Sweden. Firm pay gaps open already at career start, implying that children from more privileged backgrounds find more favorable entry points to the labor market. Their pay advantage widens further in early career as they climb the firm pay ladder faster, switch firms more frequently and secure higher pay gains conditional on switching. Skill sorting explains most of the widening, but not the initial pay gaps at career start. These results are robust to accounting for compensating differentials and alternative measures of firm quality.
Making Criminal Background Salient: How Universal Access to Online Criminal Records Affects Ex-Offenders
(with Hans Grönqvist, Susan Niknami and Mårten Palme)
Sibling correlations in education, income and ability by socioeconomic background
(with Akib Khan and Olof Rosenqvist)
Abstract: It is well-documented that family background is important in virtually all aspects of life. While there is a vast literature on the heterogeneity of the importance of family background, often measured in terms of sibling correlations, across countries, less is known about heterogeneities across social groups within a country. In this paper, using Swedish register data, we compare sibling differences in socioeconomic outcomes across fine-grained groups defined by socioeconomic status. There is a long-standing theoretical discussion on the relationship between sibling differences and parental socioeconomic status in which predictions depend on if parents reinforce, or compensate for, initial ability differences between siblings. We find a clear pattern which shows that sibling correlations generally decline in parental socioeconomic status. The pattern is true for both skills, schooling and earnings and is robust to variations in the way we define the parental groups.