Title

Estimating the Employer Switching Costs and Wage Responses of Forward-Looking Engineers

Author(s)

Jeremy T. Fox Jeremy Fox (University of Chicago and NBER)

Abstract

I estimate the relative magnitudes of worker switching costs and whether the employer switching of experienced engineers responds to outside wage offers. Institutional features imply that voluntary turnover dominates switching in the market for Swedish engineers from 1970 to 1990. I use data on the allocation of engineers across a large fraction of Swedish private sector firms to estimate the relative importance of employer wage policies and switching costs in a dynamic programming, discrete choice model of voluntary employer choice. The differentiated firms are modeled in employer characteristic space and each firm has its own age wage profile. I find that a majority of engineers have moderately high switching costs and that a minority of experienced workers are responsive to outside wage offers. Younger workers are more sensitive to outside wage offers than older workers.

Creation Date

2009-01

Section URL ID

IRS

Paper Number

543

URL

https://dataspace.princeton.edu/bitstream/88435/dsp010k225b06h/1/543.pdf

File Function

Jel

J42, I11, L13

Keyword(s)

monopsony papers, Sweden, Swendish firms, wages, engineers

Suppress

false

Series

1