Petri Böckerman

Abstract: This paper examines the effect of innovative work practices on the prevalence of sickness absence and accidents at work. We focus on the �bundles� of workplace innovations that consist of self-managed teams, information sharing, employer-provided training and incentive pay. We use nationally representative individual-level data from the Finnish Quality of Work Life Survey from 2008. The findings point to the conclusion that HPWS has little impact on the overall health of employees.

Abstract: The labour share of GDP has declined in recent decades in many leading economies. This paper examines the mechanisms of falling labour share using Finnish manufacturing plant-level data over three decades. Using a useful variant of the decomposition method, we make a distinction between the changes in the average plant and the micro-level restructuring. We show that micro-level restructuring is the link between the declining labour share and increasing productivity, and that increased international trade is a factor underlying those shifts.

Abstract: The paper asks whether R&D�s productivity impacts are conditional on the gap of a plant�s productivity from the industry�s technological frontier. The results show that a plant�s own R&D and a parent firm�s R&D have a positive productivity impact. The impact of a plant�s own R&D decreases as the gap from the industry�s technological frontier grows. Furthermore, the productivity impact of other firms� (geographic) distance-weighted R&D is, on average, positive. However, this impact increases as the gap from the technological frontier grows.

Abstract: Objectives: The paper explores how two well-established, utility-based health-related quality-of-life (HRQoL) measures (EQ-5D and 15D) capture the negative effects of various chronic conditions on subjective well-being (SWB). This is important, as both SWB and health utility can be important aims of health policy and instruments in resource allocation. Methods: A general population survey representing the Finnish population aged 30 years and over covering 25 self-reported somatic conditions and four psychiatric disorders diagnosed by interviews. Results: Both EQ-5D and 15D fail to capture the effects of some chronic conditions on SWB, but the conditions differ between the instruments. Even after controlling for both EQ-5D and 15D simultaneously, common psychiatric disorders decrease SWB by 0.4 points on a scale 1�10. Conclusions: Using health utility as a basis for resource allocation is likely to underfund the treatment of psychiatric disorders, in comparison to their effect on the SWB of the population. Different HRQoL instruments yield somewhat different results for different conditions.

Abstract: We examine the effects of establishment- and industry-level labor market turnover on employees� well-being. The linked employer-employee panel data contain both survey information on employees� subjective well-being and comprehensive register-based information on job and worker flows. We test for the existence of compensating wage differentials by explaining wages and job satisfaction with average uncertainties, measured by an indicator for a high excessive turnover (churning) rate. The results are consistent with the theory of compensating wage differentials, since high uncertainty increases real wages, but high uncertainty has no effect on job satisfaction while not controlling for wages.

Abstract: This paper examines the role of physical strength in the determination of the height wage premium by using the �Health 2000 in Finland� data that contain both self-reported information on the physical strenuousness of work, and information on muscle mass from medical examinations. The results suggest that there are generally no distinct differences in the height premium between four different work strain categories. We also find that muscle mass is positively associated with wages per se. The premium is both statistically and economically more significant for men than for women. In terms of occupational sorting, we observe that the shortest men do physically very demanding work and the tallest do sedentary work, even after controlling for the influences of age and education.

Abstract: Background: Sickness absenteeism has been a focus of the EU Labour Force Surveys since the early 1970s. In contrast, sickness presenteeism is a newcomer. Based on surveys, this concept emerged in the empirical literature as late as the 1990s. Knowledge of the determinants of sickness presenteeism is still relatively sparse. Methods: The article examines the prevalence of sickness presenteeism in comparison with sickness absenteeism, using survey data covering 725 Finnish union members in 2008. We estimate logit models. The predictor variables capture working-time arrangements and the rules at the workplace. We include control variables such as the sector of the economy and educational attainment. Results: Controlling for worker characteristics, we find that sickness presenteeism is much more sensitive to working-time arrangements than sickness absenteeism is. Permanent full-time work, mismatch between desired and actual working hours, shift or period work and overlong working weeks increase sickness presenteeism. We also find an interesting trade-off between sickness categories: regular overtime decreases sickness absenteeism, but increases sickness presenteeism. Conclusions: Two work-related sickness categories, absenteeism and presenteeism, are counterparts. However, the explanations for their prevalence point to different factors.

Abstract: OBJECTIVE:: To examine the predictors of sickness presenteeism in comparison with sickness absenteeism. The article focuses on the effects of working time match and efficiency demands and differentiates the estimates by a respondent's self-assessed health. METHODS:: We use survey data covering 884 Finnish trade union members in 2009. We estimate logistic regression models. All models include control variables such as the sector of the economy and the type of contract. RESULTS:: Working time match between desired and actual weekly working hours reduces both sickness absence and presenteeism for those workers who have poor health. We also find that efficiency demands increase presenteeism for those workers who have good health. CONCLUSIONS:: The effects of working time match and efficiency demands on the prevalence of sickness absence and presenteeism are strongly conditional on a worker's self-assessed health level.

Abstract: The paper explores wage flexibility in Finland. The study covers the private sector workers by using three data sets from the payroll records of employers� associations. The data span the period 1985-2001. The results reveal that there has been macroeconomic flexibility in the labour market. Average real wages declined during the depression of the early 1990s and a large proportion of workers experienced real wage cuts. However, the evidence based on individual-level wage change distributions shows that real wages, especially, are rigid downwards. In particular, during the late 1990s, individual-level wage changes regained the high levels of real rigidity that prevailed in the 1980s, despite the continued high (but declining) level of unemployment.

Abstract: This paper examines the relationship between obesity and labour market success in Finland, using various indicators of individual body composition along with BMI (Body Mass Index). Weight, height, fat mass and waist circumference are measured by health professionals. We find that only waist circumference has a negative association with wages for women, whereas no obesity measure is significant in the linear wage models for men. However, all measures of obesity are negatively associated with women�s employment probability and fat mass is negatively associated with men�s employment probability. We also find that the use of categories for waist circumference and fat mass has a substantial influence on the results. For example, the category for high fat mass is associated with roughly 5.5 per cent lower wages for men. All in all, the results indicate that in the absence of measures of body composition, there is a risk that labour market penalties associated with obesity are measured with bias.

Abstract: We examine the relationship between unemployment and self-assessed health using the European Community Household Panel for Finland over the period 1996-2001. Our results show that the event of becoming unemployed does not matter as such for self-assessed health. The health status of those that end up being unemployed is lower than that of the continually employed. Therefore, persons who have poor health are being selected for the pool of the unemployed. This explains why, in a cross-section, unemployment is associated with poor self-assessed health. All in all, the cross-sectional negative relationship between unemployment and self-assessed health is not found longitudinally.

Abstract: Background: Aggregate time-series evidence has shown that overall per capita alcohol consumption is associated with sickness absence. This study re-examines the relationship between alcohol consumption and sickness absence by using individual-level microdata and methods that yield results which are less likely to be due to spurious correlations. Methods: Data on sickness absence and alcohol consumption for 18 Finnish regions over the period 1993-2005 was used. Sickness absence was measured as the number of sickness absence days during a year. Alcohol consumption was measured as the number of alcohol drinks consumed per week. The individual-level relationship between alcohol consumption and sickness absence was estimated by using Poisson regression models. Unobserved determinants of lifestyle behaviours associated with the region and survey year were controlled for. Personal characteristics as well as the clustering of observations by regions were also taken into account. Results: The estimates show that alcohol consumption is associated with sickness absence. The positive relationship between alcohol consumption and sickness absence is particularly pronounced for low-educated males. Conclusions: Aggregate time-series evidence for the relationship between alcohol consumption and sickness absence is confirmed by using individual-level microdata. The policy lesson is that it is important to take into account the effects of alcohol consumption on the prevalence of sickness absence (i.e. labour supply on an intensive margin) when considering the level of taxation of alcohol beverages.

Abstract: We analyze the role of adverse working conditions in the determination of employees� quit behavior. Our data contain both detailed information on perceived job disamenities, job satisfaction, and quit intentions from a cross-section survey and information on employees� actual job switches from longitudinal register data that can be linked to the survey. We show that job dissatisfaction that arises in adverse working conditions is related to job search and this in turn is related to actual job switches.

Abstract: This paper studies the sensitivity of various health indicators to income inequality as measured by regional Gini coefficients, using individual microdata from Finland over the period 1993�2005. There is no overall association between income and health at the regional level. We discovered that, among men, there are no significant associations between income inequality and several measures of health status. Among women or among both sexes combined, there are some indications of associations in the predicted direction between income inequality and physical health, disability retirement, sick leave, and consumption of medicines, but none are robust to different model specifications. Only among the population aged less than 30 there is some indication that mental health is associated with inequality. Our findings confirm that income inequality in small populations (not large enough to measure the overall class pyramid of the society) is often immaterial for health outcomes.

Abstract: Following an agreement between the trade unions and the employer organizations in 1993, Finnish employers could temporarily pay less than the existing minimum wage for young workers. We examine the effects of these minimum wage exceptions by comparing the changes in wages and employment of the groups whose minimum wages were reduced with simultaneous changes among slightly older workers for whom the minimum wages remained unchanged. Our analysis is based on payroll record data and minimum wage agreements from the retail trade sector. The results show that average wages in the eligible group declined only modestly. We find no significant effects on employment.

Abstract: This paper evaluates the labour market effects of the introduction of the polytechnic education system in Finland. The polytechnic reform gradually transformed former vocational colleges into polytechnics. Since the timing of the reform differed across schools, we can compare the performance of polytechnic graduates to the performance of vocational college graduates controlling for both the year and the school effects. The results are somewhat sensitive to how the selectivity issues are treated but generally suggest that both the earnings and the employment levels of post-reform graduates are higher in the field of business and administration. The effects are much smaller and usually insignificant in other fields.

Abstract: This paper examines the employment effects of mergers and acquisitions (M&As) by using matched establishment-level data from Finland. Our data register practically almost all M&As in all sectors. We compare the employment effects of cross-border M&As with the effects arising from two different types of domestic M&As and internal restructurings. The results show that cross-border M&As lead to downsizing in manufacturing employment. The effects of cross-border M&As on employment in non-manufacturing are much weaker. Changes in ownership associated with domestic M&As and internal restructurings also typically cause employment losses, but they exhibit an interesting sectoral variation.

Abstract: We study the predictors of sickness absences among 2800 Finnish workers responding to the cross-sectional Quality of Work Life Survey in 1997. The data contain detailed information on the prevalence of adverse working conditions at the workplace from a representative sample of wage and salary earners. We show by using recursive multivariate models that the prevalence of harms at the workplace is associated with job dissatisfaction and dissatisfaction with sickness absences. The policy lesson is that the improvement of working conditions should be an integral part of any scheme aimed at decreasing sickness absence.

Abstract: This paper examines the relationship between the physical strenuousness of work and the BMI in Finland, using individual microdata at 5-year intervals over the period 1972�2002. Data came from the National FINRISK Study which contains self-reported information on the physical strenuousness of a respondent's occupation. Our estimates show that the changes in the physical strenuousness of work explain around 7% at most of the increase in BMI for Finnish males observed over a period of 30 years. The main reason for this appears to be the effect of the physical strenuousness of work on BMI which is rather moderate. According to the point estimates, BMI is 2.4% lower when a male's occupation is physically very demanding and involves lifting and carrying heavy objects compared with a sedentary job (reference group of the estimations), other things being equal. Furthermore, it is very difficult to associate the changes in the occupational structure with the upward trend in BMI for females, and the contribution of the changes in the occupational structure is definitely even smaller for females than it is for males. All in all, we show that the changes in self-reported occupation show a slight association with the changes in the logarithm of the BMI scores.

Abstract: Centralized nominal wage freezes together with a positive inflation rate produced real wage cuts for a large proportion of workers during the worst recession years of the early 1990s. Hence, centralized bargaining shaped the adjustment. The share of nominal wage cuts does not increase with falling inflation, which is consistent with downward wage rigidities. Full-time workers have had a lower likelihood of wage cuts compared with part-time workers. Declines in wages have also been more common in small plants. There is an important transitory component in wage cuts.

Abstract: This paper analyses polytechnic graduate placement in Finnish manufacturing. The paper uses a register-based data source covering white-collar manufacturing workers over the period 1995-2004. Taken together, the results show that wages and job classification are higher for polytechnic graduates, once other covariates are controlled for. Despite this, almost 20% of graduates from polytechnics have been forced to take a position in manufacturing in which they can be considered to be overeducated. Interestingly, Bachelors of Business Administration are not as well placed as Bachelors of Engineering.

Abstract: Despite a rapidly expanding theoretical and empirical literature emphasising the role of incessant intra-industry restructuring in productivity growth, few studies have gone beyond the framework of the representative firm in examining convergence or divergence in regional productivity. We use unique longitudinal plant-level data over a long period of time and apply a useful variant of productivity decomposition methods to study differences in productivity-enhancing restructuring within manufacturing industries among Finnish regions. Long-lasting differences in industry productivity growth between Southern and Eastern Finland can be attributed to the �creative destruction� components of productivity growth, mainly to the between and entry components.

Abstract: This paper explores the relationship between height-adjusted weight and economic conditions in Finland, using individual microdata for the period 1978-2002. If anything, the results reveal that an improvement in regional economic conditions measured by the employment rate produces a decrease in BMI, other things being equal. The Finnish evidence presented does not support the conclusions reported for the USA, according to which temporary economic slowdowns are good for health. In contrast, at least BMI seems to increase during slumps.

Abstract: This paper explores the connection between alcohol-related mortality, drinking behavior, and macroeconomic conditions in Finland using both aggregate and microlevel data from recent decades. The aggregate data reveal that an improvement in economic conditions produces a decrease in alcohol-related mortality. Microlevel data show that alcohol consumption increases during economic expansion while the probability of being a drinker remains unchanged. This demonstrates that alcohol-related mortality and self-reported alcohol consumption may be delinked in the short-run business cycle context. One explanation for this paradox is that most harmful forms of drinking are not captured in survey-based data used to study the effect of macroeconomic conditions on alcohol consumption. Our evidence does not overwhelmingly support the conclusions reported for the United States that temporary economic downturns are good for health.

Abstract: This paper explores domestic mergers and acquisitions (M&As) from the regional perspective. The Finnish evidence reveals that geographical closeness is a characteristic of great importance for domestic M&As. Thus, a great number of M&As occur within narrowly defined regions. Interestingly, domestic M&As reinforce the core-periphery dimension. The results from the matched firm-level data show that larger companies can overcome geographical boundaries more easily and domestic M&As are more likely to occur in regions that contain a great number of companies. In addition, the results reveal that a strong ability by an acquiring company to monitor the target (measured by the knowledge embodied in human capital or in research and development stock) can support M&As that occur across distant locations.

Abstract: The paper finds that adverse working conditions have a very minor role in the determination of individual wages. In contrast, adverse working conditions substantially decrease the level of job satisfaction and the perception of fairness of pay at the workplace. This evidence speaks against the existence of compensating wage differentials, but is consistent with the view that the Finnish labour market functions in a non-competitive fashion.

Abstract: This paper explores the connection between unemployment and subjective well-being in Finland using cross-sections for the years 1990, 1996 and 2000 from World Values Surveys. Interestingly, an unprecedented increase in the national unemployment rate (from 3 to 17%) did not produce a drop in the mean level of subjective well-being. Personally experiencing unemployment reduces life satisfaction, but does not have a significant effect on happiness in ordered logit estimation. However, generalized ordered logit estimation reveals that being unemployed has a negative effect on happiness at lower happiness scores, but no significant effect at high happiness levels.

Abstract: Union density declined in Finland by more than 10 percentage points in less than 10 years. This paper analyses the reasons behind the decline, using micro data from the 1990s. According to our results, the changes in the composition of the labour force and the changes in the labour market explain only about a quarter of this decline. The main reason for the decline appears to be the erosion of the Ghent system, due to the emergence of an independent unemployment insurance fund that provides unemployment insurance without requiring union membership. We also find that the decline in the union density can be attributed to the declining inclination of the cohorts born after the early 1960s to become union members.

Abstract: This study explores the impact of plantlevel labor market dynamics and housing markets on gross migration flows. The internal and the external reorganizations of regional labor markets are shown to be related. An increase in internal turnover of jobs and workers in regional labor markets is found to increase netmigration. This effect arises mainly from a reduction in outmigration. Housing markets constitute constraints for migration. In particular, an increase in regional housing prices and a large share of owneroccupancy housing discourages netmigration to a region by reducing inmigration. In contrast, the outmigration rate remains largely unaffected by housing markets.

Abstract: This study explores the structure and the dynamics of regional job and worker flows. The measures of job and worker flows are related to economic fluctuations, demographic factors and industry structure by employing the data of 85 Finnish regions over the period 1988�97. It is shown that labour market dynamics differ markedly between regions. As in previous analyses of linked employer�employee data, job and worker flows are shown to behave cyclically. In addition, the results indicate that observable differences in regional productivity, in-migration, demographics and industry structure help to explain the prevailing disparities in regional labour markets.

Abstract: This study addresses the connection between reorganization and unemployment in the labour market. Reorganization of regional labour markets measured by simultaneous gross migration flows lowers the unemployment rate, based on evidence from a panel of Finnish regions. However, reorganization is shown to be unrelated to long-term unemployment.

Abstract: The perception of job instability is an important measure of subjective well being of individuals, because most people derive their income from selling their labour services. The study explores the determination of perception of job instability in Europe. The study is based on a large-scale survey from the year 1998. There are evidently large differences in the amount of perceived job instability from country to country. The lowest level of perceived job instability is in Denmark (9%). In contrast, the highest level of perceived job instability is in Spain (63%). Perceived job instability increases with age and an earlier unemployment episode. An increase in educational level, on the other hand, leads to a decline in the perception of job instability. In addition, a temporary contract as such does not yield an additional increase to the perception of job instability. The perception of job instability is more common within manufacturing industries and there is some evidence for the view that it increases according to the size of the firm.

Abstract: The study explores the determination of regional unemployment in Finland. The evaluation of regional labour markets is based on unique, linked panel data that is created by matching the conventional economic fundamentals with the measures based on gross flows of jobs and workers. The striking empirical finding is that the reorganization of labour markets lowers the unemployment rate in the Finnish regions. In other words, the reallocation of labour resources seems to be good for regional employment.

Abstract: The study is about the determination of regional productivity in a Nordic welfare state, more particularly in Finland. Regional labour productivity is related to industry structure, demographic factors and the variables that capture the reorganization of labour markets. The data covers 85 Finnish regions over the period of 1989-1997. Industry structure is an important determinant of labour productivity in the Finnish regions. In particular, the emerging new economy in terms of ICT manufacturing yields an increase in labour productivity measured by the value-added divided by the total hours of work of the regions, but the positive impact of ICT manufacturing is tightly limited to its direct contribution. The share of ICT services has no impact on the level of labour productivity across the Finnish regions. In contrast to the U.S. and European stylized features, there is no evidence for the view that when the density of economic activity increases (measured by the number of employees divided by surface area), the labour productivity of the Finnish regions rises. In addition, restructuring at the plant level of the regions is not directly related to the evolution of labour productivity based on the evidence.

Abstract: This study explores the determination of average working time in the context of a Nordic welfare state. The study is focused on the Finnish case. The issue is explored by using data from six industries from 1960 to 1996. The main empirical result is that both an increase in labour productivity and a widening of the tax wedge have contributed to a decline in average working time in Finland. These observations are consistent with the predictions of a theoretical model that is based on the notion of equilibrium working hours.

Abstract: This study is about the effects of work-sharing on employment in Finland. The results reveal that a reduction in average hours seems to deliver an increase in employment on the condition that output does not deteriorate as a result of shorter working time. However, the maintenance of output level in the case of shorter average working hours is a challenging exercise. In addition, the conduct of worksharing as a policy scheme is limited by the Lucas critique.

Abstract: The study is about the incidence of overtime hours in Finland. The investigation uses individual-level data from the manufacturing industries from 1989 to 1995. The results show that the hours of overtime divided by the number of total hours decline as an employee ages. The overtime hours decline in wage per straighttime hours and in straight-time hours. Males and newcomers tend to work more overtime, but leavers work less overtime. The overtime hours are definitely more frequent in the population of small establishments. The degree of tightness in regional labour markets had no overall impact on the incidence of overtime from 1991 to 1995. There are strong industry effects.

Abstract: The study compares the great depressions of the twentieth century in Finland from the perspective of labour market adjustment channels. The increase in employment was much more rapid during the rebound from the great depression of the 1930s compared with the recovery from the great slump of the 1990s. There was a mild decline in real wages in the manufacturing industries during the early 1990s. However, during the slump of the 1930s there was a severe decline in real wages. The nominal wage adjustment of the Finnish labour markets has been entirely different in these depressions. During the 1990s there was no decline at all in nominal wages within the manufacturing industries. This pattern is in sharp contrast to the deep cuts in nominal wages during the 1930s. There was an increase in the level of labour productivity during the great depressions of the twentieth century that is linked to restructuring during the times of economic slowdown.

Abstract: The aim of this study is to characterize the structure and the evolution of Finnish regional labour markets in terms of gross job and worker flows using establishment- level data. There is no solid evidence that the gross job creation rate is on average lower in Eastern and Northern Finland. The rapid rise in regional unemployment disparities in the 1990s can be explained via the rise in the disparities in the gross job destruction rates across regions during the great slump of the early 1990s. There are also distinct regional differences in the adjustment of labour demand at the establishment level.