Visiting Aarhus University in Denmark (by Kazuhiko Sumiya)

1. Background about my research

I’m interested in labour market reallocation processes and associated wage changes in European countries. One of the main channel through which reallocation processes take place is job-to-job transitions, that is, workers change jobs by on-the-job search. This reallocation process enhances the aggregate allocation of workers to firms in many cases because workers tend to move from less productive firms to more productive firms. In addition, their wages tend to increase upon job-to-job transitions. Thus, the reallocation process through job-to-job transitions is important for both of the aggregate allocation and individual wages. For this reason, the recent literature in labour economics focuses on this topic. However, there is little descriptive and comprehensive evidence on reallocation processes and associated wage changes. Therefore I’m conducting the detailed empirical analysis using the data from European countries.

When I applied for the Travel Award, I had already done the analysis using the UK data. The results suggest interesting patterns and important policy implications. Since Europe has different labour market institutions among its countries, I was sure that I can get further insights by comparing the results from the UK to other European countries. For this reason, I was considering using the Danish data because the Danish labour market differs so much from the UK labour market. Comparing countries will shed new lights on important similarities and discrepancies in European labour markets.

2. Why did I apply for the Travel Award?

I applied for the Travel Award in order to visit Aarhus University and use the Danish administrative data. Since the data set is confidential and has complicated structures, I needed the help from the experts in Aarhus University to use the data properly.

3. How was the visit?

I stayed at Department of Economics for three months. The Danish administrative data is rich and unique because it contains detailed information on individuals for the whole population in Denmark. In addition, the data is longitudinal and covers the very long time periods including the recent recession around 2007-2009. This information gives the new interesting findings on reallocation processes and associated wage changes.

This travel is essential also because my co-authors are faculty members of Aarhus University. In the joint project with them, we are considering the relationship between tax systems and reallocation processes, which are also related to the current project.

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Thus, this travel not only allows me to use the data properly to conduct my own research but also gives me the opportunity to progress the joint work with my co-authors.

During the visit, I also attended the conferences in Denmark and Germany to present our joint research and got good feedbacks from the participants. Incorporating these feedbacks, I have finished writing up a first draft of academic paper. This draft is still very preliminary and incomplete but will be subsequently submitted to an academic journal for publication. The paper is closely related to many aspects of labour markets and, therefore, is expected to attract interests among policy makers in European countries.

Kazuhiko Sumiya