Arngrim Hunnes

Internal wage dispersion and firm performance : white-collar evidence

Purpose - The purpose of this paper is to investigate the net relationship between internal wage dispersion and firm performance. Design/methodology/approach - An empirical investigation of the relationship between internal wage dispersion and firm performance is performed using linked employer-employee data for Norwegian firms from 1986 to 1997. Findings - Contrary to findings in previous empirical work of a positive relationship between internal wage dispersion and firm performance, the analysis finds no such evidence in Norwegian firms, even though internal wage dispersion has increased. Originality/value - The paper contributes to the relatively sparse empirical literature on internal wage dispersion and firm performance. Further, the analysis provides a new econometric specification for estimating internal wage dispersion that explicitly takes into account the hierarchical organization of firms. In contrast with previous work, the analysis also distinguishes between dispersion in both the fixed and variable portions of wages.

Testing the role of comparative advantage and learning in wage and promotion dynamics

Can job assignment based on comparative advantage and learning about workers’ ability explain wage and promotion dynamics within firms? In order to answer this question the Gibbons and Waldman (1999b) model is estimated in a Generalized Method of Moments (GMM) framework using a unique data set on white collar workers in Norway for the years 1987-1997. The estimation is carried out on two different occupational groups: technical and administrative white collar workers. The selection of workers into a given position within a firm hierarchy is based on comparative advantage. Both measurable and unmeasurable skills are important. This holds in both occupations studied. When it comes to firms’ learning about their workers the results are not so clear. But overall the results on learning seem to have stronger support than what previous studies have found. In general, there is more evidence for learning about administrative white collar workers than about technical white collar workers.

Stock Earnings and Bond Yields in the US 1871 - 2016: The Story of a Changing Relationship

Using historical data that spans almost 150 years, we examine whether there is a long-run equilibrium relationship between the stocks earnings and bond yields. The novelty of our econometric methodology consists in using a vector error correction model where we allow multiple structural breaks in the equilibrium relationship. The results of our analysis suggest the existence of equilibrium relationship over 1871-1929 and 1958-2017. On the two historical segments, our analysis finds that the stocks earnings yield followed the bond yield in both the short- and long-run, but not the other way around. Perhaps the most important and surprising finding of our empirical study is that, after the break in 1929, a completely new equilibrium relationship re-emerged in 1958 that was later termed as the Fed model. Our main argument for the emergence of a new equilibrium relationship is that a major ``paradigm shift in the stock valuation theory occurred in the late 1950s. To support our argument, we highlight the main historical events that potentially could have caused the transition from the old to the new paradigm. Finally, we identify the primary impetus for the paradigm shift.

Price Stability in the Periphery during the International Gold Standard: Scandinavia

According to Willis, there are two main statistical measures that have been employed in recent research when investigating inflation dynamics. These are Volatility, or how much inflation varies quarter to quarter or year to year; and persistence, or the speed with which inflation returns to baseline after a shock’.1 Furthermore, ‘Other things equal, less persistence leads to less variability. Lower persistence is associated with faster but smaller swings in inflation over time that, in statistical terms, reduce the overall variability of inflation.’2

Family Stability and Labor Market Gender Convergence

The present paper examines the historical development in the structure of the family in terms of marriage, divorce, fertility and labor 1886-2007 in order to map quantitative changes. The paper draws new information from novel Norwegian data. Along with the changing family relations we also quantify the closing of the gender gap by converging trends for both labor participation rates and wages. The paper concludes that there is a clear correspondence between gender convergence in the labor market and less stable family relations.

Price Stability and Inflation Persistence during the International Gold standard: The Scandinavian case

In the 1870s the three Scandinavian countries Denmark, Norway and Sweden formed the Scandinavian Currency Union. Both the adoption of gold and the monetary union were supposed to lead to price stability in and between these countries. By drawing on new indices of consumer prices the present paper offers an examination of inflation dynamics, defined as price stability and inflation persistence, in the periphery of Scandinavia during the heyday of the international gold standard.