Olof Ejermo
Professor
Do Higher Wages Reduce Knowledge Worker's Job Mobility? Evidence for Swedish Inventors
Author
Summary, in English
Based on linked employer-employee panel data on all Swedish inventors, this paper analyses how wages affect inventors' job mobility. It is commonly assumed that higher wages reduce mobility because they reduce the value of outside opportunities. We argue that higher wages also send performance signals to potential employers, who raise their wage offers in response. By disentangling the effects of higher wages, we show evidence of a utility and an opportunity cost effect, which reduce mobility, and a performance-signalling effect, which increases mobility. In our data, the effects cancel each other out, with no effects of wages on mobility rates on average. We find, however, that for star inventors, who have sufficiently strong alternative performance signals (e.g., strong patent records), the performance signal sent by wages is crowded out by the alternative signals. Accordingly, for star inventors we find that higher wages decrease mobility.
Department/s
- CIRCLE
Publishing year
2018-01
Language
English
Pages
108-145
Publication/Series
Journal of Management Studies
Volume
55
Issue
1
Document type
Journal article
Publisher
Wiley-Blackwell
Topic
- Economic Geography
Keywords
- Inventors
- Mobility
- Signalling
- Wages
Status
Published
ISBN/ISSN/Other
- ISSN: 0022-2380