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We study how domestic firms adapt to increased import competition from China. Using a Danish employer-employee matched dataset covering firms over the 1995–2007 period, we find that import competition significantly increases manufacturing firms' expansion of their business activities in the service industry (partial servitization); their probability of offshoring production activities abroad and of exiting the market. Import competition, however, does not induce firms to cease all of their involvement in manufacturing production by completely switching into service sector (complete servitization). These findings are confirmed using various robustness tests as well as an analogous analysis of a Portuguese employer-employee matched dataset.

Firms often impose contraints on working hours. While many believe that these constraints shape labor supply decisions, little evidence exists to support such views. We explore this relationship using linked employer-employee data on hours worked and the variation in tax rates derived from the 2010 Danish tax reform. We show that hours worked are unresponsive to individual tax changes in firms with strict constraints, whereas they respond to these changes, directly and through spillovers, in firms with looser constraints. Starting from these findings, we discuss the determinants of hours constraints between firms' technologies and coordination of hours among coworkers.

Although coworkers are spending an increasing share of their working time interacting with one another, little is known about how the coordination of hours among heterogenous coworkers affects pay, productivity and labor supply. In this paper, we use new linked employer-employee dataon hours worked in Denmark to first document evidence of positive correlations between wages, productivity and the degree of hours coordination - measured as the dispersion of hours - within firms. We then estimate labor supply elasticities by exploiting changes made to the personal income tax schedule in 2010. We find that hours coordination is associated with attenuated labor supply elasticity and spillovers on coworkers not directly affected by the tax change. These spillovers led to a 15% increase in the marginal excess burden from the 2010 tax reform, and if ignored, they induce substantial downward bias in estimates of the labor supply elasticity. We explain these findings in a framework in which differently productive firms choose whether to coordinate hours in exchange for productivity gains, leading more productive firms to select into coordinating hours and to pay compensating wage differentials.

This paper studies the relationship between immigration and offshoring by examining whether an influx of foreign workers reduces the need for firms to relocate jobs abroad. Using a Danish natural experiment and their employer-employee matched data set covering the universe of workers and firms (1995–2011), our findings show that an exogenous influx of immigrants into a municipality reduces firm-level offshoring at both the extensive and intensive margins. While the multilateral relationship is negative, a subsequent bilateral analysis shows that immigrants have connections in their country of origin that increase the likelihood that firms offshore to that particular foreign country.

We study how wage gaps across skills and the skill distribution in an economy respond to trade integration. Using administrative data of Denmark (1995–2011), we find that trade has a negative effect on the wage gap between secondary and primary education and a positive effect on the wage gap between tertiary and secondary education. We also show that trade affects skill distribution and induces skill polarization: trade has a positive effect on both the mean and standard deviation of skills. Wage‐gap changes induced by trade shocks explain about 21%–30% of the effect of trade on skills.

International audience; The offshoring of production by firms has expanded dramatically in recent decades, increasing their potential for economic growth. What determines the location of offshore production? How do countries’ policies and characteristics affect a firm's decision about where to offshore? Do firms choose specific countries because of the countries’ policies or because they know them better? In this paper, we use a rich dataset on Danish firms to analyze how decisions to offshore production depend on the institutional characteristics of the country and firm-specific bilateral networks. We find that institutions that reduce credit risk and corruption increase the probability that firms will offshore there, while those that increase regulation in the labour market decrease this probability. We also show that a firm's probability of offshoring increases with the share of its employees who are immigrants from that country of origin. Finally, our analysis reveals that the negative impact of institutions that hinder offshoring is attenuated by a strong bilateral network of foreign workers.

Human capital resources are a foundation of organizational performance, yet highly difficult to mobilize in new ventures. Given the central role of founders’ past experiences in new venture strateg...

Selling internationally requires products that resonate with an international customer base and therefore an approach to markets that is in keeping with diverse cultures (i.e., relational capital). As emphasized by international business studies, this relational capital is in turn related to the successful teaming of a diverse workforce, as this process teaches employees to operate in multicultural environments. This knowledge becomes like an intangible asset to which firms can resort, also when engaging in international transactions. We explore this channel empirically, investigating the impact of workforce diversity on firms' exporting performances and find that ethnic diversity further justifies firms' different presence in international markets. Since hiring is not a random practice, and firms ultimately select into ethnically different labor forces, we exploit the EU enlargement of 2004 to instrument for the diversity of the pool of workers locally recruitable. Because migrants tend to settle where the attitude toward them is most favorable, we use the median voter's political ideology at firm's location to measure the hostility at time of settlement. This gives our instrument spatial variation besides time variation.

Online décembre 2015 compté en 12/2015; International audience; This article contributes to the literature on knowledge transfer via labor mobility by providing new evidence regarding the role of educational diversity in knowledge transfer. In tracing worker flows between firms in Denmark over the period 1995–2005, we find that knowledge carried by workers who have been previously exposed to educationally diverse workforces significantly increases the productivity of the hiring firms. Several extensions of our baseline specification support this finding and confirm that our variable of interest affects the arrival firm's performance mainly through the knowledge transfer channel.

International audience; Using a matched employer–employee data-set, we analyze how workforce diversity associates with the productivity of firms in Denmark, following two main econometric routes. In the first one, we estimate a standard Cobb–Douglas function, calculate the implied total factor productivity and relate the latter to diversity statistics in a second stage. This reduced-form approach allows us to identify which types of labor heterogeneity appear to descriptively matter. In the second approach, we move toward a richer production function specification, which takes different types of labor as inputs and that allows for flexible substitution patterns, and possible quality differences between types. Both methods show that workforce diversity in ethnicity is negatively associated with firm productivity. The evidence regarding diversity in education is mixed.

It is a well-known fact that temporary agency workers accept high wage penalties compared to permanent workers. However, remarkably little is known about the wages of workers who regularly take jobs in the temp sector or who do temp work for a substantial period of time. Based on a rich administrative data set, the effect of the intensity of agency employment on the temp wage gap in Germany is estimated. Using a two-stage selection-corrected method within a panel data framework, the paper shows that the wage gap for temps with low treatment intensity is high but decreases with time spent in the sector, presumably reflecting that temporary agency workers are able to accumulate human capital while employed in the temp sector. However, agency employment seems to stigmatize those workers who move frequently from one temp job to the next.

PurposeThe purpose of this paper is to investigate the use of innovative workplace practices in a sample of manufacturing establishments.Design/methodology/approachThe sample comprises manufacturing establishments located in Italy and a comparable sample extracted from the British Workplace Employee Relations Survey (WERS). The paper controls for sector, size, skill quality and industrial relations.FindingsJob rotation and technical training are positively associated with current performance in both samples. On average, British establishments are more productive: the different endowment in terms of workplace practices, skills and industrial relations accounts for 40 per cent of the gap, while the different efficacy of the endowment on performance accounts for the remainder.Originality/valueIn both samples the introduction of team working implies a relatively important advance along the reorganisation process, which was undertaken in the early stages of reorganisation in British establishments but much later in Italian firms. Linking the progression of the reorganisation to non‐convexities in supermodular production functions may be an interesting line of future research.

We investigate the degree of correspondence between parents’ reports on child behavioral and educational outcomes using wave four of a rich Danish longitudinal survey of children (the DALSC). All outcomes are measured at age 11 when the children are expected to be in fifth grade. Once discrepancies are detected, we analyze whether they are driven by noisy evaluations or by systematic bias, focusing on the role of parental characteristics and response heterogeneity. We then explicitly assess the relative importance of the mother’s versus the father’s assessments in explaining child academic performance and diagnosed mental health to investigate whether one parent is systematically a better informant of their child’s outcomes than the other. Our results show that parental psychopathology, measured as maternal distress, is a source of systematic misreporting of child functioning, that the parent–child relationship matters, and that mothers are not necessarily a better informant of child functioning than fathers. This last finding should not only be valid for Denmark but also for many other countries, where the father’s role in childcare has been growing.

This paper aims at estimating early labour market outcomes of Italian university graduates across college subjects. We devote great attention to endogenous selection issues using alternative methods to control for potential self-selection associated with the choice of the degree subject in order to unravel the causal link between college major and subsequent outcomes in the labour market. Our results suggest that "quantitative" fields (i.e. Sciences, Engineering and Economics) increase not only the speed of transition into the first job and employment probability but also early earnings, conditional on employment. This paper aims at estimating early labour market outcomes of Italian university graduates across college subjects. We devote great attention to endogenous selection issues using alternative methods to control for potential self-selection associated with the choice of the degree subject in order to unravel the causal link between college major and subsequent outcomes in the labour market. Our results suggest that "quantitative" fields (i.e. Sciences, Engineering and Economics) increase not only the speed of transition into the first job and employment probability but also early earnings, conditional on employment.

In this paper, we investigate the sorting of workers in firms to understand gender gaps in labor market outcomes. Using Danish employer-employee matched data, we find strong evidence of glass ceilings in certain firms, especially after motherhood, preventing women from climbing the career ladder and causing the most productive female workers to seek better jobs in more female-friendly firms in which they can pursue small career advancements. Nonetheless, gender differences in promotion persist and are found to be similar in all firms when we focus on large career advancements. These results provide evidence of the sticky floor hypothesis, which, together with the costs associated with changing employer, generates persistent gender gaps.

High-performance work practices are frequently considered to have positiveeffects on corporate performance, but what do they do for employees? Afterassessing the correlation between organizational innovation and firm performance, this article investigates whether high-involvement work practices affect workers in terms of wages, wage inequality and workforce composition. The analysis is based on a survey directed at Danish firms matched with linkedemployer–employee data and also examines whether the relationship betweenhigh-involvement work practices and employee outcomes is affected by the industrial relations context.

International audience; We find evidence that workforce educational diversity promotes entrepreneurial behavior of employees as well as the formation of new firms, whereas diversity in demographics hinders transitions to self-employment. Ethnic diversity favors entrepreneurship in financial and business services.

International audience; This article focuses on the phenomenon of interfirm labor mobility as a potential channel for knowledge transfer. Using data from the Danish employer-employee register covering the period 1995–2005, we investigate how knowledge carriers—technicians and highly educated workers recruited from a donor firm—contribute to knowledge diffusion and enhanced productivity in the hiring (recipient) firm. Structural estimation of the hiring firms’ production functions shows that the impact of the recruitment of knowledge carriers on a firm’s value added is an increase of 1%–2%. Several robustness checks confirm this finding

Using an employer-employee dataset, we analyze how diversity in cultural background, skills and demographic characteristics affects total factor productivity (TFP) of firms in Denmark. Implementing structural estimation of firms’ production function, we find evidence that labor diversity in skills/education significantly enhances firm performance as measured by firm TFP. Conversely, diversity in demographics and ethnicity brings mixed results – both dimensions of workforce diversity have either no or negative effects on firm TFP. Hence, it seems as if the negative effects, coming from communication and integration costs connected to a more demographically and culturally diverse workforce, counteract the positive effects of diversity on firm TFP, coming from creativity and knowledge spillovers. However, we find that ethnic diversity is valuable for firms operating in industries characterized by above-average trade openness, giving support to the hypothesis that an ethnically diverse workforce provides information and access to global markets.

This paper investigates the nexus between labor diversity and innovation in a population of Danish firms. Specifically, exploiting information retrieved from a comprehensive linked employer-employee database and implementing a proper instrumental variable strategy, we are able to identify the contribution of diversity in cultural background, skills and demographic characteristics to valuable firm's innovation activity. The latter is measured by: (1) the firm's propensity to apply for a patent, (2) the number of patent applications (intensive margin) and (3) the firm's ability to patent in different technological areas (extensive margin). We find that skill diversity plays a key role in propelling firm's innovation outcomes. The positive in uence of heterogeneity in the ethnic dimension turns to be not negligible, too. Conversely, the effect of demographic diversity typically vanishes once detailed firm specifc characteristics are included as control variables.

This paper investigates the structure of the labor market in Nicaragua and is aimed at understanding the determinants of the choice between a number of segments, namely inactivity, unemployment, agriculture, the formal and the informal sectors. In addition, a model with a separate participation equation is estimated: it allows us to understand that age mainly is a supply-side factor, while education is an important element determining employer's choices Information networks, captured by the presence of a household member working in the formal sector, and geographical barriers to mobility also play a leading role. Copyright © 2009 John Wiley & Sons, Ltd.

This paper investigates the determinants of grades achieved in maths by first-year students in economics. We use individual administrative data from 1993 to 2005 to fit an educational production function. Our main findings suggest that good secondary school achievements and the type of school attended are significantly associated with maths grades. Ceteris paribus, females typically do better than males. Since students can postpone the exam or repeat it when they fail, we also analyze the determinants of the elapsed time to pass the exam using a survival analysis. Modeling simultaneously maths grades and the hazard of passing the exam, we find that the overall hazard rate of passing the exam is higher for those students who get the higher grades. The longer the students wait to take the exam, the less likely they are to obtain high grades.

This study investigates the hazard of rst job for Italian graduates. The anal- ysis is in particular focused on the transition from university to work, taking into account the graduates' characteristics and the e ects relating to degree subject. It is used a large data set from a survey on job opportunities for the 1998 Italian graduates. The paper employs a non parametric discrete-time single risk models to study employment hazard. Alternative mixing distributions have also been used to account for unobserved heterogeneity. The results obtained indicate that there is evidence of positive duration dependence after a short initial period of negative duration dependence. In addition, competing risk model with unob- served heterogeneity and non parametric baseline hazard have been estimated to characterize transitions out of unemployment.

Cross-country comparisons of subjective assessments may be ham- pered by sub-population speci…c response style. To correct for this, the use of vignettes has become increasingly popular - notably within cross- country health studies. However, the validity of vignettes as a means to re-scale across sample sub-populations critically rests on the assump- tion of "response consistency" (RC): vignettes and self-assessments are evaluated on the same scale. In this paper we seek to test this as- sumption by using objective measures of health along with subjective measures and vignettes. Our results indicate that the assumption of RC is not innocous and that our extended model improves the …t and signi…cantly changes the cross-country rankings of health vis-á-vis the standard Chopit model.

Cross-country comparisons of subjective assessments are rendered difficult if not impossible because of sub-population specific response style. To correct for this, the use of vignettes has become increasingly popular, notably within cross-country health studies. However, the validity of vignettes as a means to re-scale across sample sub-populations critically rests on the assumption of "response consistency" (RC): that vignettes and self-assessments are evaluated on the same scale. In this paper we seek to test this assumption by applying objective measures of health along with subjective measures and vignettes. Our results indicate that the assumption of RC is not innocous and that our extended model relaxing this assumption improves the fit and significantly changes the cross-country rankings of health vis-\'{a}-vis the standard Chopit model. Cross-country comparisons of subjective assessments are rendered difficult if not impossible because of sub-population specific response style. To correct for this, the use of vignettes has become increasingly popular, notably within cross-country health studies. However, the validity of vignettes as a means to re-scale across sample sub-populations critically rests on the assumption of "response consistency" (RC): that vignettes and self-assessments are evaluated on the same scale. In this paper we seek to test this assumption by applying objective measures of health along with subjective measures and vignettes. Our results indicate that the assumption of RC is not innocous and that our extended model relaxing this assumption improves the fit and significantly changes the cross-country rankings of health vis-\'{a}-vis the standard Chopit model.

This paper investigates the determinants of grades achieved in mathematics by first year students Economics. We use individual administrative data from 1991 to 2005 to fit an educational production function. Our main findings suggest that good secondary school achievements and good maths skills (pre-college) are usually associated with higher grades. Ceteris paribus, females typically do better than males. Since students can postpone the exam or repeat it when they fail, we also analyse the determinants of the elapsed time to pass the exam using survival analysis. Estimating a competing risks model, we find that there is evidence of true negative duration dependence for high grades: the longer students wait to take the exam, the less likely they are to take high grades.

We investigate whether individual attitudes toward risk may explain why, though there exist huge di erences in the employment returns of graduates by fields of study, the most demanded subjects by the economy are less frequently chosen. The econometric methodology is based on a three step procedure which controls for selectivity bias in the rst stage (Heckman, 1979; Lee, 1983; Trost and Lee, 1984). Using a large data set from a survey on the 2001 Italian high school graduates, the main results indicate that students take into account the a priori probability of unsuccess when choosing the college subject. Moreover, students coming from a lower socio-economic background display more risk aversion.

We investigate the degree of correspondence between parents' reports on child behavioral and educational outcomes using the most recent available wave of a rich Danish longitudinal survey of children (the DALSC). All outcomes are measured at age 11 when the children are expected to be in fifth grade. Once discrepancies are detected, we analyze whether they are driven by noisy evaluations or by systematic bias, focusing on the role of parental characteristics and response heterogeneity. We then explicitly assess the relative importance of the mother's versus the father's assessments in explaining child academic performance and diagnosed mental health to investigate whether one parent is systematically a better informant of their child's outcomes than the other.

This paper investigates whether education and working in a physically demanding job causally impact temporary work incapacity, i.e. sickness absence, and permanent work incapacity, i.e. the inflow to disability via sickness absence. Our contribution is to allow endogeneity of both education and occupation by estimating a quasi-maximum-likelihood discrete factor model. Data on sickness absence and disability spells for the population of older workers come from the Danish administrative registers for 1998-2002. We generally find an independent role of both education and occupation on temporary work incapacity only. Having at least primary education reduces women's (men's) probability of temporary work incapacity by 16% (38%) while working in a physically demanding job increases it by 37% (26%). On the other hand, conditional on sickness absence, the effects of education and occupation on permanent work incapacity are generally insignificant.