Vol. 15, No. 1

Eva M. Meyersson-Milgrom, Trond Petersen and Rita Asplund:
Pay, Risk, and Productivity. The case of Finland 1980–1996 (pp. 3–23)


This paper reports on four topics. To what extent are piece-rate systems used among manufacturing workers in Finland? What is the effect on the average pay level of using piece- versus time-rate systems? How much wage risk is associated with a piece-rate system? How much of the pay differential between piece and time-rate workers is compensation for extra effort and how much is compensation for bearing additional risk? Have these relations changed over time? We have access to unique individual-level data on payment systems from several thousand establishments and more than a quarter of a million individuals in the Finnish private sector.

(JEL: J24, J31, J33)

Fredrik Andersson:
Technological Change, Labour Contracts and Income Distribution (pp. 24–35)


An overlapping-generations model is developed; human capital, embodied in education and general on-the-job training, is important, necessitating investments in the first period of work. Competition among employers combined with shortterm contracting imposes an incentive constraint on the intertemporal wage payments which is costly due to creditmarket imperfections. Workers work too much and are paid too little in the first period. Exogenous technological change complementary with skills aggravates the wage distortion, thereby inducing compensating wage increases. Income taxes mitigate the distortions.

(JEL: D91, J22, J24)

Petri Böckerman:
Overtime in Finland (pp. 36–54)


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.

(JEL: J22)

Finnish Economic Papers 1/2002